United Kingdom: Unemployment moves closer BOE threshold
January 22, 2014
In December, jobless claims fell 24,000 over the previous month according to the Office for National Statistics (ONS). The print marked an improvement over the revised 34,300 drop recorded in November (previously reported: 36,700) and was under the 32,000 decrease in jobless claims the markets had expected.
The unemployment rate - derived from a different survey - inched down from 7.4% in the three months up to October to 7.1% in the three months up to November, thus reaching the lowest level in almost five years. The figure undershot market expectations of the rate falling to 7.3%. As a result, the unemployment level is now slightly above the 7.0% threshold the Bank of England (BOE) introduced at its 7 August monetary policy meeting at which time it made a commitment to keep interest rates on hold until unemployment fell below the threshold.
FocusEconomics Consensus Forecast panelists expect unemployment to average 7.3% in 2014, which is down 0.1 percentage points from last month's forecast. For 2015, the panel expects the unemployment rate to drop to 7.0%.
Author: Dirina Mançellari, Senior Economist