U.K. labor market momentum appears strong in the first quarter of this year. In spite of ongoing uncertainties over the U.K.’s withdrawal from the EU, the latest U.K. labor market figures indicated that economic trends continued to be strong in the start of 2019, matching developments seen in the official GDP data. Employment rose 179k in the three-months to February, as compared with consensus expectations of 181k. Such a solid rate of job creation proved enough to deliver a further 27k fall in the unemployment level that kept the jobless rate at 3.9 percent, matching the lows not previously seen in the U.K. since 1975.
Delving into the details, the composition of employment growth also made pleasing news. More than three-quarters of the 179k total gain in employment in the three months to February were classified as being full-time. Furthermore, with surveys of business activity once again pointing to some resilience in firms’ hiring intentions demand for labor should continue to keep the supply side tight in the months ahead, noted Lloyds Bank in a research report.
The latest number of job vacancies indicated that the number of positions for which employers were actively seeking to recruit from outside their businesses continued to be elevated, at 852k, close to record highs. Interestingly, for each vacancy, on average there were less than two unemployed people.
A considerable proportion of the rise in employment was accounted for by people transferring into roles straight from being outside the labor force and classed as inactive, with the remaining increase in employment coming from those moving into the labor market and those already in the labor force but who were earlier not employed.
“Overall, the latest UK labour market report shouldn’t really change expectations for interest rates much. The Bank of England used the February Inflation Report and the minutes to the March MPC meeting to signal a more cautious outlook on Bank Rate increases. However, this latest news is a reminder that there is pay growth in a tight labour market, which is consistent with a higher level for Bank Rate in due course”, added Lloyds Bank.
At 13:00 GMT the FxWirePro's Hourly Strength Index of British Pound was bearish at -91.7099 while the FxWirePro's Hourly Strength Index of US Dollar was bullish at 79.263 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
