"The path of monetary policy, the path of interest rates is going to be calibrated very carefully to ensure that only when we see sustainable growth in jobs, in incomes and in spending, will we make adjustments"
- Mark Carney, BoE Governor
The U.K. economy is currently suffering from turbulent economic conditions even despite a recent upswing in growth last year. The latest fundamental data is supporting the case the central bank will stick to accommodative monetary policy for the foreseeable future.
This time, the ONS said the key unemployment rate inched higher 0.1% to 7.2% for the quarter ending in December, falling short of analysts' expectations of no change at all. The claimant count rate, however, stood at the lowest level since November 2008, moving lower to 3.6% from 3.7% a quarter earlier. The report showed the number of people claiming unemployment benefits plunged by 27,600 outpacing markets' forecasts for a 20,000 drop. During the release of the latest inflation report, Mark Carney said the unemployment rate will reach the threshold of 7% by this spring. Despite bright prospects, Carney also pointed out the slack within the domestic economy remains sufficient, as the number of Britons working part-time just because they cannot find a full-time job still remains around a record high.
Also Wednesday minutes from the last MPC meeting showed policymakers were unanimous on both rates and asset purchases, widely meeting expectations. Members also see the nation's GDP rising around 1% in the first quarter of this year, however a turmoil in emerging markets can pose risks for future prosperity.
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