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17 Apr 2015
BoE rate hike not in sight – MP
FXStreet (Barcelona) - Dean Popplewell, Director of Currency Analysis at MarketPulse, reviews today’s UK jobs data release, and further notes that the rate of pay growth is not strong enough to suggest that inflation might hit BoE’s target quickly, which makes the possibility of a rate hike in this year minimal.
Key Quotes
“U.K Employment rose by +248k in the three-months to February. During that time the employment rate climbed to a new record high which has managed to push the unemployment rate down from +5.7% to +5.6%, its lowest level in seven-years.”
“Analysts believe that the continued strength of the latest job surveys and the further -20.7k monthly fall in the claimant count last month would suggest that the U.K unemployment rate is likely to fall even lower over the coming months.”
“So, it is not a surprise that wage growth is gradually building. U.K workers are beginning to see their living standards recover, mostly due to the sharp drop in oil and food prices.”
“Despite productivity starting to edge up, the rates of pay growth are probably still not strong enough to suggest that inflation will swiftly return to the BoE MPC’s +2% target.”
“If that is the case, then the likelihood of an interest rate rise within the next year still looks like an outside bet. Hence the reason why fixed income traders continue to push a U.K rate rise further out their curve.”
Key Quotes
“U.K Employment rose by +248k in the three-months to February. During that time the employment rate climbed to a new record high which has managed to push the unemployment rate down from +5.7% to +5.6%, its lowest level in seven-years.”
“Analysts believe that the continued strength of the latest job surveys and the further -20.7k monthly fall in the claimant count last month would suggest that the U.K unemployment rate is likely to fall even lower over the coming months.”
“So, it is not a surprise that wage growth is gradually building. U.K workers are beginning to see their living standards recover, mostly due to the sharp drop in oil and food prices.”
“Despite productivity starting to edge up, the rates of pay growth are probably still not strong enough to suggest that inflation will swiftly return to the BoE MPC’s +2% target.”
“If that is the case, then the likelihood of an interest rate rise within the next year still looks like an outside bet. Hence the reason why fixed income traders continue to push a U.K rate rise further out their curve.”