Base rate likely to remain stable as unemployment falls to 7.1%

by Aaron Strutt

Jan 23 2014

New figures from the Office for National Statistics (ONS) show the unemployment rate fell by 167,000  to 2.32 million in the three months to November.  Approximately 7.1% of the economically active population are unemployed and this is down 0.5% on the figures from June to August 2013.

Mark Carney, the Governor of the Bank of England, originally suggested that the bank rate may increase if the unemployment rate falls to 7%, but Mr Carney has also reiterated that he will not be pressured into changing rates.

Minutes for the Bank's latest Monetary Policy Committee meeting showed the nine members “saw no immediate need to raise Bank Rate even if the 7% unemployment threshold was to be reached in the near future. They go onto say: “Moreover, it was likely that the headwinds to growth associated with the aftermath of the financial crisis would persist for some time yet and that inflationary pressures would remain contained.”

January 23, 2014