Unemployment up… but Bank of England helps sterling

This morning’s unemployment figures were worse than expected – with the number of peoplpe claiming benefit up 23,500 in January and the official unemployment rate now at 7.8%.

Usually the Pound would fall on such negative news – but the figures were released at the same time as the Bank of England announced that its Monetary Policy Committee voted 9-0 to pause Quantitative Easing at its February meeting. Analysts had expected a closer decision, and this has been seen as a positive signal for the UK economoy and therefore for the Pound.

As a result the rates for sending money overseas in most currencies have risen slightly this morning.

Tomorrow’s public sector borrowing figures are the next big test for the UK’s recovery and are likely to move exchange rates back down sharply if borrowing is much higher than expected.