"This is a good number. We think the risks are towards the unemployment rate falling more quickly than the BOE thinks, and today's figures highlight that risk"
- George Buckley, chief U.K. economist at Deutsche Bank AG
Britain's labour market has joined other sectors in June and showed signs of improvement, as jobless claims fell, while overall unemployment rate was on hold. Figures from the Office for National Statistics showed that the number of people filing claims for unemployment benefits fell by 29,000, just slightly less than the revised drop of 29,400 claimants for June, however almost twice bigger figure than analysts expected. There are now 29.78 million people in the country in the workforce, the highest since records began in 1971. In addition to that, there were 2.51 million people out of work, 4,000 less from the January to March 2013 and down 49,000 from the same period a year earlier. Nonetheless, the unemployment rate remains at 7.8%, unchanged from the previous months and still well above the 7% rate target set by the central bank. Earlier, BoE's Governor Mark Carney said that interest rates are not expected to rise before this level is reached.
Also Wednesday the U.K. authorities said that during the last policy meeting Mark Carney was unable to unite other policymakers on implementing forward guidance, as they were not univocal on their decision. On August 1 the Monetary Policy Committee voted 8-1 with Martin Weale dissenting. Weale is favour of forward guidance, however, he disagreed with a clause on concern it may undermine the BoE's inflation-fighting credibility.
© Dukascopy Bank SA