The number of people out of work and receiving benefits fell by 4,100 in December

GBPEUR/GBPUSD

The Pound declined against the Euro and the U.S Dollar yesterday, after a report on the UK labour market dampened speculation that the Bank of England will begin to raise UK interest rates. The report from the Office of National Statistics showed that UK jobless claims dropped in December to the lowest level in 21 months, while the unemployment rate fell, as Britain's economic recovery maintained its pace at the end of the fourth quarter.
The number of people out of work and receiving benefits fell by 4,100 in December from the previous month. The surprising improvement in labour market conditions is probably temporary with up to 350,000 public-sector jobs is expected to be lost this year. The Pound endured a mixed reaction in the market following the release of the report, with investors split on whether it is too soon for the Bank of England to begin tightening policy.
The government is hoping that private-sector companies keep creating jobs over the next four years, despite the recent increase in VAT. Officials are warning that the budget cuts will curtail the pace of the economic recovery, while the highest inflation rate in eight months is adding pressure on the Bank of England to begin tightening monetary policy.... Read more