Unemployment and Bank of England news today

15 August, 2012

Tom Arnold

Today is likely to be quite a critical day for Sterling’s short term aspirations, with both unemployment data and the Bank of England’s monthly meeting minutes due out at 9.30am. Both are key indicators of the UK economy’s strength and future policy position.

Unemployment has been relatively good in the last few months with figures showing a drop in the number of unemployed people for the last three months. Likewise hopes are for a small drop this month as well, but some analysts are a little mystified by these figures as with growth down, and the economy mired in recession, lowering unemployment seems almost impossible. Many speak of Jubilee and Olympic affects skewing the figures, so we shall have to wait and see, but expect a quick reversal in Sterling’s current strength if the figures show any increase at all.

The Bank of England minutes should also prove interesting reading. Following last week’s quarterly report from Mervyn King, the Bank’s governor, everything was very doom and gloomy about the UK economy as he revised our growth forecast down to zero. However he did also imply that UK interest rates are unlikely to be lowered any further which actually saw the Pound gain a little strength back despite the overall negative feeling. We will see a detailed breakdown of the Bank’s most recent meeting’s discussion and votes and therefore should be able to glean a little more on their likely stance in the coming couple of months. The big news in light of static interest rates will almost certainly focus on anymore Quantitative Easing – we shall see…

Given the likely volatility over these important data releases, make sure you stay in touch with your CI account manager, to keep abreast of developments.

The Premier League season kicks off again this weekend, with all the too-ings and fro-ings of the transfer window still in full swing. Which players will be swapping Euro earnings for Sterling, or maybe London Pounds for Manchester Pounds? Who knows, but they should certainly let us know so we can help them maximise their take home pay!