"The labor market data for July — the first 'hard' figures since referendum - suggest that the economic recovery is slowing, but do not give a resounding recession signal".
- Samuel Tombs, Pantheon Macroeconomics
The number of people filing for unemployment benefits in Britain dropped unexpectedly in the seventh month of the year, official data revealed on Wednesday. According to the Office for National Statistics (ONS), claims for state unemployment benefits slipped 8,600 in July, whereas the preceding month's gain was revised up to 900 from the initially reported increase of 400. Market analysts pencilled in a rise of 5,200 in the reported month. In the meantime, the UK unemployment rate came in at 4.9% in three month to June, in line with the previous month's figure and analysts' expectations. Furthermore, average weekly earnings rose 2.4% including bonuses in June, surpassing last month's 2.3% increase, but missing the 2.5% market forecast. Excluding bonuses, weekly earnings grew 2.3% in the same month, while markets anticipated the reading to remain unchanged at 2.2% in June. Once the report was released, the British Pound jumped against the Euro, but gave up all those gains shortly.
The data provided showed that the labour market remained strong on the eve of the Brexit referendum. The Bank of England forecasts unemployment to rise markedly within the next couple of years amid the country's decision to leave the European Union. At its latest meeting in August, the central bank cut its key interest rates by 25 basis points to a record low of 0.25%.
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