The Pound has leapt against its peers to push beyond a one-year high against the Euro and US Dollar after data showed that the unemployment rate in the UK fell more than forecast to 7.1%, just off the Bank of England’s target of 7%.
According to the Office for National Statistics the UK’s jobless rate fell from 7.4% to 7.1% in November, beating economist forecasts for a figure of 7.3%. Upon hearing the news the Pound lurched higher as investors increased their bets that the Bank of England will review its monetary policy.
Unemployment in dropped by 167,000 to 2.32 million in the three months through November compared with the previous figure. The decline is the biggest drop recorded since October 1997 and is the second largest fall since records began in 1971.
The data piles the pressure onto Bank of England governor Mark Carney to change his guidance policy and raise interest rates. With the 7% target now expected to be achieved far earlier than expected economists now forecast that the BoE will alter its policy when it publishes its quarterly inflation report on the 12th of February. Currently interest rates in the UK are at a record low of 0.5%.
The Pound also found support from data which showed that the nation’s public sector burrowing fell more than expected. In December burrowing fell to £10.400 billion compared to the previous month’s figure of £14.799 billion. Economists had been forecasting a fall to £12.300 billion. The figure is good news for Chancellor George Osborne and Prime Minister David Cameron as the Conservative Party will use the nation’s economic recovery as a key focus for upcoming elections.
Pound Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,US Dollar,1.6542 ,
Pound Sterling,,Euro,1.2213 ,
Pound Sterling,,Australian Dollar,1.8640 ,
Pound Sterling,,Canadian Dollar,1.8138 ,
[/table]
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