Wealth Manager - the site for professional investment managers

Register for full access to Citywire’s Fund Manager database, news and analysis. Registration is free and only takes a minute.

Forward guidance questioned as unemployment drops to lowest level since 2009

UK joblessness fell to 7.4% in the three months to October, the lowest level since April 2009 and not far off the level that could prompt a rise in interest rates.

In the third quarter, 250,000 more people aged over 16 were employed than in the three months to July, according to data from the Office for National Statistics.

The Bank of England's Monetary Policy Committee indicated as part of its forward guidance policy that interest rates were likely to rise when the indicator fell below 7%, which it forecast would not happen until late 2016.

'The chance of the threshold being reached next year has certainly grown,' Samuel Tombs, UK economist at Capital Economics, said.

But he added that in reality the Bank is unlikely to raise rates when unemployment falls to this critical level.

'Even if the economic recovery continues to bring the unemployment rate down rapidly, we continue to think that the subdued inflation outlook will enable official interest rates to remain on hold for another couple of years,' he said.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Paul Niven: I won't rip up the Foreign & Colonial Trust history book

Paul Niven: I won't rip up the Foreign & Colonial Trust history book

The newly appointed manager of the Foreign & Colonial trust talks about his plans for UK's oldest investment company.

Play Dangerous daisy chains, Black Friday blues and Uber valuations

Dangerous daisy chains, Black Friday blues and Uber valuations

This week’s Investment Pulse looks at the domino effect in European banks, America’s disappointing Black Friday and how much Uber is really worth.

Play Baillie Gifford's Snell bullish on India's prospects following election

Baillie Gifford's Snell bullish on India's prospects following election

Citywire AA-rated manager is seeing good overall growth for the Asia reason but is wary of varying valuations.

Your Business: Cover Star Club

Manchester wealth firm hires Coutts director for London launch

Manchester wealth firm hires Coutts director for London launch

Former Coutts director Tony Robinson has joined Chartered Wealth Management to head the company’s newly opened London office.

Wealth Manager on Twitter