UK unemployment rate falls to 5.2%, lowest in nearly 10 years

cells

http://www.bbc.co.uk/news/business-35111020

http://www.telegraph.co.uk/finance/economics/12053072/UK-unemployment-wages-pay-slowdown-jobs-employment.html


31.3 million people in work, 505,000 more than for a year earlier.

:beer:

From George:
Excellent stats this morning: a record employment rate (73.9%), unemployment & youth unemployment rates fall to 9 year lows & wages rising

Generali

The MPC will be voting in rate rises in the new year IMO.

Graham_Devon

Generali wrote: »

The MPC will be voting in rate rises in the new year IMO.

It was announced last night by someone at the BOE that they won't. (Was part of the coverage from the US rise). I realise this doesn't mean they won't, but they are certainly adamant to keep stating stuff.

New benchmark now is earnings. Not inflation or unemployment anymore. Apparently earnings will need to be running at "a comfortable" 3% before they consider rate rises in the UK.

Mark Carney has also stated "You don't want to know everything that is going on in my mind, I can assure you". I thought we were paying him a colossal amount to know what was going on in his mind!

michaels

Generali wrote: »

The MPC will be voting in rate rises in the new year IMO.

Economic growth slowing noticeably, real wage increases falling, effectively no limit to the available labour pool from Europe...we'll see.

wotsthat

michaels wrote: »

Economic growth slowing noticeably, real wage increases falling, effectively no limit to the available labour pool from Europe...we'll see.

....and no sign of any inflation.

They'll go up though. There's only so many times you can strongly hint at increases and not do it.

Forward guidance (getting people to change behaviour in anticipation of any change) relies upon that guidance occasionally being reliable. I'm a year into a 5 year fix based on the words that came out of Carney's mouth - I was played and made myself look a chump. It would be over egging it to say I feel violated because I can hardly complain about 2.29% until 2019.

chucknorris

Generali wrote: »

The MPC will be voting in rate rises in the new year IMO.

Do you think the markets might respond like they just have about the Fed rise? Appreciating that overall it is a good sign? After all, rates aren't going to go anywhere very fast.

Graham_Devon

wotsthat wrote: »

Forward guidance (getting people to change behaviour in anticipation of any change) relies upon that guidance occasionally being reliable. I'm a year into a 5 year fix based on the words that came out of Carney's mouth - I was played and made myself look a chump. It would be over egging it to say I feel violated because I can hardly complain about 2.29% until 2019.

You know what wotsthat.

We have something to agree on. And not just the chump bit

It was OK to start with. We had an unemployment figure and forward guidance that interest rates would look to be raised when unemployment hit the magical 7% number.

As soon as it got close, forward guidance changed. Afterall, as Carney said himself, he was not aware unemployment would fall as fast as it did.

We then had months of "rises are closer" and "rates will be lower for longer" speeches. This was all dependant on who he was speaking to. The CBI? Well rates would be lower for longer. BOE reports? Time is getting closer for a rate rise.

And now we have the situation where Carney didn't know oil would fall or that China would have problems. So based on that, all previous guidance is out of the window and it's all based on wage rises. (convenient now they are falling back).

If wage rises grow over the coming few months, it will change again as it snowed in December and Carney didn't realise it sometimes snows in December.

chewmylegoff

Graham_Devon wrote: »

You know what wotsthat.

We have something to agree on. And not just the chump bit

It was OK to start with. We had an unemployment figure and forward guidance that interest rates would look to be raised when unemployment hit the magical 7% number.

As soon as it got close, forward guidance changed. Afterall, as Carney said himself, he was not aware unemployment would fall as fast as it did.

We then had months of "rises are closer" and "rates will be lower for longer" speeches. This was all dependant on who he was speaking to. The CBI? Well rates would be lower for longer. BOE reports? Time is getting closer for a rate rise.

And now we have the situation where Carney didn't know oil would fall or that China would have problems. So based on that, all previous guidance is out of the window and it's all based on wage rises. (convenient now they are falling back).

If wage rises grow over the coming few months, it will change again as it snowed in December and Carney didn't realise it sometimes snows in December.

Would you prefer that our Central bank ignored a collapse in the price of oil or a slowing of economic growth in China and just blindly stuck to its guns, failing to respond to a changing economic climate? Would a Devonian Governor say: "We said we would increase interest rates so we will even though things have changed and it is now inappropriate to do so?"

Generali

chucknorris wrote: »

Do you think the markets might respond like they just have about the Fed rise? Appreciating that overall it is a good sign? After all, rates aren't going to go anywhere very fast.

Rates rising is great news. The people that have the greatest access to economic data think that the economy is doing well and have acted accordingly.

Graham_Devon

chewmylegoff wrote: »

Would you prefer that our Central bank ignored a collapse in the price of oil or a slowing of economic growth in China and just blindly stuck to its guns, failing to respond to a changing economic climate? Would a Devonian Governor say: "We said we would increase interest rates so we will even though things have changed and it is now inappropriate to do so?"

I'd rather it didn't provide specific forward guidance based on specific scenarios that don't, it appears, take into account any external shocks.

We need to remember this is a new policy and not something we've had so specifically before now.

chucknorris

Generali wrote: »

Rates rising is great news. The people that have the greatest access to economic data think that the economy is doing well and have acted accordingly.

When rates do get back to normal (or what I perceive as the 'new norm') I might have another look at bonds. But I have been wary of investing in bonds because of what would happen when rates went back up. My logic might be flawed, as I didn't really do much research, as I wasn't that drawn by bonds in the first place, but for the sake of diversity, I will have another look at some point.