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  • FIRST POST
    • Former MSE Helen
    • By Former MSE Helen 22nd Jan 14, 10:12 AM
    • 2,324Posts
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    Former MSE Helen
    MSE News: Unemployment drops sharply so are interest rates set to rise?
    • #1
    • 22nd Jan 14, 10:12 AM
    MSE News: Unemployment drops sharply so are interest rates set to rise? 22nd Jan 14 at 10:12 AM
    "Unemployment has fallen to 7.1% close to the figure which will be used to decide whether interest rates rise..."

    Read the full story:

    Unemployment drops sharply so are interest rates set to rise?




    Click reply below to discuss. If you havent already, join the forum to reply. If you arent sure how it all works, read our New to Forum? Intro Guide.

Page 1
    • Morglin
    • By Morglin 22nd Jan 14, 10:24 AM
    • 14,659 Posts
    • 26,975 Thanks
    Morglin
    • #2
    • 22nd Jan 14, 10:24 AM
    • #2
    • 22nd Jan 14, 10:24 AM
    Hopefully, but as so many of these so called jobs are zero contracts, temporary, shuffling of registers etc., I can't see the Bank of England doing much about interest rates.

    Lin
    You can tell a lot about a woman by her hands..........for instance, if they are placed around your throat, she's probably slightly upset.
    • dave76
    • By dave76 22nd Jan 14, 10:30 AM
    • 240 Posts
    • 35 Thanks
    dave76
    • #3
    • 22nd Jan 14, 10:30 AM
    • #3
    • 22nd Jan 14, 10:30 AM
    I thought the 7% level was just a gate to rate rises and not a trigger?? Just because we reach that level doesn't mean all the other gates have been opened...
    • richardw
    • By richardw 22nd Jan 14, 10:34 AM
    • 18,965 Posts
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    richardw
    • #4
    • 22nd Jan 14, 10:34 AM
    • #4
    • 22nd Jan 14, 10:34 AM
    What sort of jobs are they?

    The devil's in the detail.
    Posts are not advice and must not be relied upon.
    • Morglin
    • By Morglin 22nd Jan 14, 10:35 AM
    • 14,659 Posts
    • 26,975 Thanks
    Morglin
    • #5
    • 22nd Jan 14, 10:35 AM
    • #5
    • 22nd Jan 14, 10:35 AM
    Some City analysts today think we will have a rise by the end of the year perhaps, and for me it would be good, as regards savings etc., but i suppose we will have to wait and see.

    Lin
    You can tell a lot about a woman by her hands..........for instance, if they are placed around your throat, she's probably slightly upset.
    • WestonDave
    • By WestonDave 22nd Jan 14, 10:37 AM
    • 5,038 Posts
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    WestonDave
    • #6
    • 22nd Jan 14, 10:37 AM
    • #6
    • 22nd Jan 14, 10:37 AM
    The normal determinant of interest rates is using them to control inflation. The 7% unemployment figure was set as a point when it would be deemed acceptable to start using increased interest rates to force down inflation which had been above target. However as inflation is currently within target, the 7% unemployment figure becomes less relevant because its secondary to the real decision factor - inflation.
    Adventure before Dementia!
    • Morglin
    • By Morglin 22nd Jan 14, 10:37 AM
    • 14,659 Posts
    • 26,975 Thanks
    Morglin
    • #7
    • 22nd Jan 14, 10:37 AM
    • #7
    • 22nd Jan 14, 10:37 AM
    What sort of jobs are they?

    The devil's in the detail.
    Originally posted by richardw
    Ah well, that's the problem - registers are shuffled and although it appears more work is there, the benefit bill keeps rising, which suggests there are just as many claimants, but some of those have been moved, for various reasons, onto other lists.

    Lin
    You can tell a lot about a woman by her hands..........for instance, if they are placed around your throat, she's probably slightly upset.
    • teabelly
    • By teabelly 22nd Jan 14, 10:39 AM
    • 1,207 Posts
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    teabelly
    • #8
    • 22nd Jan 14, 10:39 AM
    • #8
    • 22nd Jan 14, 10:39 AM
    You'd want a sustained drop in unemployment into genuine jobs before you put up interest rates. Bearing in mind wages have hardly risen and the cost of living has risen a lot I think it would be foolish to pressurise a lot of working people further until wages have started to recover more.
    • Aquamania
    • By Aquamania 22nd Jan 14, 11:09 AM
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    Aquamania
    • #9
    • 22nd Jan 14, 11:09 AM
    • #9
    • 22nd Jan 14, 11:09 AM
    I thought Mark Carney said last August "that the Bank would not consider raising interest rates until the unemployment rate has fallen to 7% or below." (with some caveats)

    I don't remember any suggestion that rates will definitely rise once unemployment falls to 7%. But certainly that particular restriction put in place to provide financial stability at that time would no longer apply once the unemployment rate falls to 7% or less.
    • NPowerUser
    • By NPowerUser 22nd Jan 14, 12:04 PM
    • 403 Posts
    • 693 Thanks
    NPowerUser
    Carney, hand picked by George Osborne, will just move the goalposts to ensure that nothing happens to interest rates this side of the general election.

    • wymondham
    • By wymondham 22nd Jan 14, 3:23 PM
    • 5,527 Posts
    • 10,261 Thanks
    wymondham
    Carney, hand picked by George Osborne, will just move the goalposts to ensure that nothing happens to interest rates this side of the general election.
    Originally posted by NPowerUser

    I suspect you are correct on this, which begs the question about BOE independence?
    • dekaspace
    • By dekaspace 22nd Jan 14, 5:21 PM
    • 4,900 Posts
    • 4,602 Thanks
    dekaspace
    How many people are the ones who have gone from the breadline to no benefits so forced to work long hours for at most the same breadline they had on benefits if not worse.

    As for the rise of employment does that take into account immigrants into work i.e its all fine to say that its risen but if the positions are filled by immigrants coming across to work then the British worker is still unemployed but the figures still go up.
    • Ken68
    • By Ken68 23rd Jan 14, 8:09 AM
    • 6,497 Posts
    • 4,139 Thanks
    Ken68
    Probably Christmas jobs, so just a blip.
    • InA
    • By InA 23rd Jan 14, 12:05 PM
    • 121 Posts
    • 381 Thanks
    InA
    These employment statistics are questionable and have been based on dubious definitions of which I will give some examples. The most striking is the definition of employment. I don't know anyone who could subsist on an hour's pay a week.

    From the DWP website:

    Key terms:

    • Employed – at least an hour’s paid work a week
    • Unemployed (ILO definition) – looked for work in the last 4 weeks and
    available to start job within 2 weeks, or waiting to start a job.
    • Economically active – employed or unemployed.
    • Economically inactive – not seeking or not available for work (or both).
    From the ONS report:

    Definition of employment

    Employment – Anyone doing one hour or more a week of paid work is counted in the employment figures. This includes people on government supported training programmes if they are engaging in any form of work, work experience or work-related training. The employment estimates also include unpaid family workers, who work in a family business and benefit from the profits of the business although they do not receive a formal wage or salary.
    Claimant count

    Introduction of Universal Credit

    The Pathfinder for Universal Credit started on 29 April 2013 with the introduction of this new benefit in one Jobcentre Plus office (Ashton under Lyne). The pathfinder was extended to a second Jobcentre Plus office (Wigan) on 1 July 2013 and two further offices (Oldham and
    Warrington) joined the pathfinder on 29 July 2013.

    The progressive national roll out of Universal Credit across the rest of the UK commenced with Hammersmith Jobcentre Plus office on 28 October 2013 and was followed by Rugby and Inverness Jobcentre Plus offices on 25 November 2013.

    Universal Credit will replace a number of means-tested benefits including the means-tested element of Jobseeker’s Allowance (JSA). It will not replace contributory based JSA.

    The Claimant Count measures the number of people claiming benefits principally for the reason of being unemployed.

    The Claimant Count estimates from May 2013, published in this Statistical Bulletin, do not include claimants of Universal Credit. The absence of Universal Credit claimants is expected to have a small effect on the Claimant Count from May 2013. This assessment reflects the information published by DWP on 3 December 2013. ONS will include jobseeker Universal Credit claims in the Claimant Count statistics as soon as possible.
    I would also like to know how the ONS obtained information on the total number of unpaid family workers included in the employment total.

    Also, how many of the "employed" total are individuals who have been counted more than once? e.g. You can work an hour or more as unpaid worker for the family business whilst continuing to work in a full or part time job.

    Why aren't journalists reporting or questioning these facts?
    • JohnRo
    • By JohnRo 23rd Jan 14, 12:35 PM
    • 2,721 Posts
    • 2,552 Thanks
    JohnRo
    Why aren't journalists reporting or questioning these facts?
    Originally posted by InA
    Real investigative journalism died in the 90's imo, it's all about toeing the official line, career paths and pay in the MSM these days.

    Also it has to be said a heck of a lot of apathy and disenfranchised indifference about.
    'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB
  • BillJones
    How many people are the ones who have gone from the breadline to no benefits so forced to work long hours for at most the same breadline they had on benefits if not worse.

    As for the rise of employment does that take into account immigrants into work i.e its all fine to say that its risen but if the positions are filled by immigrants coming across to work then the British worker is still unemployed but the figures still go up.
    Originally posted by dekaspace
    Employment is up, which does incude immigrants, but unemployment is also down, which is good news for everyone.

    I understand that some people want to deny that the country is undergoing a rapid, broad-based recovery, but that simply does not match the facts.
    • silverwhistle
    • By silverwhistle 23rd Jan 14, 1:39 PM
    • 2,337 Posts
    • 3,344 Thanks
    silverwhistle
    Well, obviously Tory Central Office has been recruiting.

    Not much signs of improvement in manufacturing, exports or productivity, although that could be because companies have access to cheap labour and aren't investing in training and equipment. No commitment to a zero hours worker who they can get rid off easily.

    If I were an interest-only (or even any) mortgage holder I'd be foregoing holidays and spending this year to get my capital reduced whilst interest rates are so low. I pity those for whom things are already tight. If rates do go up let's hope that if some of it goes to savers that they spend, otherwise the economy will really tank. Unfortunately you suspect that the banks will just say thank you, and reinforce their balance sheets.
    • JohnRo
    • By JohnRo 23rd Jan 14, 1:42 PM
    • 2,721 Posts
    • 2,552 Thanks
    JohnRo
    I understand that some people want to deny that the country is undergoing a rapid, broad-based recovery, but that simply does not match the facts.
    What facts? House price bubble?

    5 years after the investment banks brought the financial world to its knees, pensioners and savers are still being robbed via artificial interest rates to keep the banks, their housing ponzi and its mortgage welfare recipients afloat.

    We were told QE was to help SME, instead the insolvent banks used it to repair their official balance sheets and continue speculating for profit.

    Any real recovery, and the jury is still out, is being built on sand.
    'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB
    • Aquamania
    • By Aquamania 24th Jan 14, 12:28 PM
    • 2,019 Posts
    • 821 Thanks
    Aquamania
    Looks like I wasn't too far off the mark with my earlier post

    Bank of England governor Mark Carney has said there is "no immediate need to increase interest rates".

    He told BBC Newsnight the case for a rate rise would be examined in next month's inflation report, but that it was important to look at the whole labour market, not just one indicator.

    On Wednesday, the jobless rate fell to 7.1%, close to the 7% at which Mr Carney said he would consider a rise.

    He also said the change, when it comes, would be very gradual.
    ...
    He said that the 7% figure was one that he had used to capture the idea that unemployment was going to have to fall considerably before he would "even begin to think about" raising rates.
    http://www.bbc.co.uk/news/business-25868380
  • hanlou007
    any interest rate rises are going to have to be slow......whatever people think, due to the crazy mortgages of the past, people were allowed to use things like tax credits and child benefit as an income to get more of a mortgage (even i got asked by Barclays about it but refused to take this payment into account for my mortgage)

    Then they start to take this money away so a double whammy for homeowners is when the rates go up !!
    Yes these people deserve all they get but so many are in this situation........
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