"Once growth and demand pick up more strongly for a sustained period, productivity will itself move up rather sharply. That would mean unemployment might move down less than would normally be the case given the strength in demand and economic activity."
- David Miles, Bank of England policy maker
The fact Britain's economy is on the path of sustain recovery is no longer a question, as the improvement was seen in all sectors of the economy, however, Bank of England policymaker David Miles expressed his concerns the recent strength of economy should translate into a sharp drop in unemployment. On Wednesday figures showed the nation's unemployment rate fell to 7.7% between May and July, down from 7.8% a month earlier. The total number of jobless people also fell, reaching 2.487 million, 24,000 less from the previous period. The Office for National Statistics also showed the number of people claiming for jobless benefits dropped 32,600 hitting 1.402 million, the lowest since February 2009. Nevertheless, Miles said he is rather doubt the unemployment rate will fall to the 7% threshold relatively quickly. Meanwhile, he along with other policymakers expects the jobless rate to fall to 7% no sooner than in late 2016. Also Thursday during his testimony to the U.K. parliamentary Treasury Committee BoE's Governor Mark Carney reassured officials the BoE will tighten the policy when the economy will able to handle it. Regarding the abnormally high inflation rate, he mentioned the economy is on a path to move from current level back down to 2% in a responsible way. Carney's comments are expected to calm down the market, as so far he failed to keep the market interest rates tamed, as the cost of government debt rose sharply since early August.
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