HiFX comments on the latest employment report

Chris Towner, chief economist at HiFX, comments on this morning’s employment report:

“Sterling dropped marginally when the UK employment report was released this morning, suggesting that the economy remains not too hot and not too cold, allowing the Bank of England to continue to sit on their hands for the foreseeable future.

“The good news from the report came in the fact that the number of unemployed in the UK has made significant progress over the last years and it was only in 2011 that we were in the darkest days after the credit storm with unemployment at 8.5%. Average earnings dropped to 3% y/y, below expectations of 3.2%; however there is still a comfortable gap of 3% for the consumer between earnings and inflation.

“Although sterling dropped following the release of the report, overall the economy is steady and calm giving the Bank of England opportunity to continue to monitor and comment without requiring any real action.”