- Joe Grice, chief economic adviser at the ONS
It finally happened. The unemployment rate moved below the Bank of England earlier implemented threshold, while wage growth met inflation. The Sterling was boosted by the upbeat data from the U.K. labour market on Wednesday, with the cable soaring 0.50% to 1.6814, moving above the daily R2 and a strong psychological level of 1.68. Moreover, taking into consideration ‘buy' signals from technical indicators, pending orders that are placed to buy the pair and strong fundamentals from the U.K, the pair is projected to continue moving higher.
A highly-anticipated report from the ONS showed the jobless rate measures by the International Labour Organization methods plunged to 6.9% in the first quarter from 7.2% three months earlier, moving below 7% for the first time since April 2009. The number of people claiming for jobless benefits hit the lowest since November 2008, while the claimant count rate fell for the 17th straight month. Employment in the U.K. now stands at a record 30.389 million, bolstered by the number of people who are self-employed. The improvement was expected, while what is more important is the 1.7% increase in the total pay growth. The last time the indicators was higher was in June 2013. Regular pay soared 1.4%. Luckily for the BoE, the inflation continued falling in March, and a steady rise in wages will help to eliminate the remaining slack sooner than expected.
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