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UK jobless rate falls to 7.1%

  • UK November unemployment rate surprised the markets, falling to 7.1% (prior: 7.4% forecast: 7.3%). Jobless rate is now only 0.1% above the BoE target of 7.0% set in August.
  • December claimant count came out worse than expected, falling only by 24K (forecast: 35K drop).
  • BOE January meeting minutes showed all the 9 MPC members voted to keep monetary policy unchanged. The bank sees no urgent need to raise interest rate if jobs rate hits 7% in near future. MPC admits that the 7% threshold will be reached “materially earlier” than it was previously expected.
  • GBP/USD surged by 100 pips on the news, hitting $1.6550, while EUR/GBP dropped to 0.8180. 

Chart. H4 GBP/USD

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