GBP Falls as Unemployment Rate Rises

By TraderVox.com

Tradervox.com (Dublin) – Despite the frantic efforts made by the BOE, the UK economy seems to be sinking lower. Without talking about the QE program which has been marred with a lot of questions, the unemployment data from the UK seems to make a big blow to the BOE’s efforts. The jobless claims have increased more than it was anticipated by most economists. The report released today showed that the unemployment-benefit claims rose by 7,200 to reach 1.612 million making this the 12^th monthly increase in a raw. Most of the analysts and economists who were surveyed had expected an increase of 5,000.

There has been a very heated debate on whether the BOE is making the right move in buying government bonds and these results are expected to intensify the debate further. Prime Minister David Cameron will be put to task by the opposition politicians who think that he is cutting government spending too fast. According to Samuel Tombs of Capital Economics, the figures points to a weak picture hence laying doubt on the current economic growth in the country.

After the release of this report, the pound pared gains against the dollar showing the impact of the result in the market; however, the pound gained against the euro. This can be related to the positive reports coming from the US market and the fear over the euro crisis that still lingers. The pound traded at $1.5675 against the dollar at 15:29 GMT after it reached $1.5744 earlier in the day in London. The pound gained 0.2 percent against the euro to trade at 83.13 pence per euro.

According to the Office of National Statistics, the number of unemployed people rose by 28000 to reach 2.67 million as the number of people in work rose by 9,000 to reach 29.1 million. These results came just days after surveys if manufacturing and services indicated that the economy had returned to growth in the first quarter. The economy had contracted by 0.2 percent in the last quarter forcing the BOE to embark on a QE program.

 Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox