The Claimant Count Change in the UK fell by 38.6K in January, more than expected. The unemployment rate fell to 5.7%, also better than expected and average hourly earnings stand at 2.1% better than expected. The MPC minutes show that members expect inflation to correct sharply after the impact of oil prices moves away.
GBP/USD shoots up to 1.5415. Update: the pound continues higher.
More data: wages ex bonuses rose by 1.7%, slightly below expectations, but this is still strong.
Within the minutes, two members see the decision as finely balanced and one member saw equal chances of loosening and tightening. The vote on both the rates and QE was a unanimous 9:0.
The United Kingdom was expected to report a drop of around 25K in jobless claims for the month of January, an unemployment rate of 5.8% in December and a y/y gain of 1.7% in that month as well. In addition, the meeting minutes from the recent rate decision are released, and a unanimous decision not to change rates was expected.
GBP/USD traded around 1.5360 towards the publication.
The pound has been gaining ground lately, especially as the Bank of England manages to see through the fall in oil prices and is still set to raise the rates in 2015.
Yesterday, headline CPI inflation fell to 0.3%, the lowest in many years, but core CPI actually ticked up to 1.4%.
For more, see the pound/dollar prediction
