UK Unemployment Rate Falls To 7.1% In Sept-Nov Period; BOE Minutes Show MPC Was Unanimous On Policy Decision In January Meeting

  @arjunkashyapa.kashyap@ibtimes.com on January 22 2014 5:15 AM
UK Employment
Commuters walk across London Bridge to the City of London on Aug. 7, 2013. Reuters/Luke MacGregor

The unemployment rate in the UK fell to 7.1 percent in the September 2013 to November 2013 period, down 0.5 percentage points from the previous three-month period, official data from the Office for National Statistics showed Wednesday.

There were 2.32 million unemployed people, down 167,000 from the June 2013 to August 2013 period, the report said, adding that the employment rate in the September 2013 to November 2013 period for those aged between 16 to 64 rose to 72.1 percent, an increase of 0.5 percentage points from the previous three-month period.

And, in the three-month period between October 2013 to December 2013, total pay and regular pay rose by 0.9 percent over the same period in the previous year, the data showed.

Meanwhile, according to the minutes of the Jan. 8-9 meeting of the Bank of England’s Monetary Policy Committee, or MPC, which also were released Wednesday, the MPC voted unanimously to keep the Bank Rate at a low of 0.5 percent while maintaining asset purchases at 375 billion pounds ($618 billion).

The MPC noted, according to the meeting’s minutes, there was further evidence that “the domestic recovery was robust” driven by consumer spending and easier credit conditions, while a "rapid growth in employment had resulted in a sharper fall in unemployment than had been expected."

On the subject of the U.S. Federal Reserve’s decision to reduce the pace of its asset-purchase program, the MPC noted that the FOMC’s decision “had come a little earlier than most market participants had expected and had been accompanied by a change in guidance on the date of the first rise in the federal funds rate, which would be ‘well past the time’ that US unemployment reached the 6½% threshold."

Continuing on the subject of the U.S. economy, the MPC noted that the “recovery in the United States appeared stronger than previously thought.”

On the subject of economies in the euro area, the MPC observed: “Market conditions for the euro-area periphery countries had improved,” adding: “Unlike in the United Kingdom and the United States, where the main equity price indices were around all-time high levels, euro-area equity prices remained substantially below their pre-crisis peaks.”

In the January meeting, the MPC believed that growth prospects for the international economy “had improved as the recovery continued in the United States and became more firmly entrenched in some other advanced economies,” while the outlook “had become more balanced.”

However, the MPC also sounded a note of caution, stating that “clear headwinds remained, particularly in the euro area, where growth remained weak and inflation low.”

The next MPC meeting is schedule for Feb. 5-6.

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