Unemployment Rises to 7.2%

Unemployment has risen for the first time in 13 months - securing the case for low interest rates following yesterday's below-target inflation figure of 1.9%

Emma Wall 19 February, 2014 | 10:23AM
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Unemployment has risen to 7.2%, putting to rest any question of an interest rate rise. Economists expected the jobs figure to stick at 7.1% - just 10 basis points off the unemployment target rate at which Bank of England governor Mark Carney originally said he would consider raising Base Rate.

But last week Carney confirmed in his inflation report that rates would be staying low for some time to come – and this week’s economic indicators backed up his plans. Yesterday’s inflation announcement revealed CPI had fallen to below the Government target for the first time since November 2009, and a higher jobless number today also points towards a low-rate environment.

Jeremy Cook, chief economist at foreign exchange company, World First, said thanks to yesterday’s inflation number alongside this jobs figure would mean rate hikes beginning in the second quarter of 2015 and no sooner.

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Emma Wall  is former Senior International Editor for Morningstar