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Unemployment Falls Further

Written By On 22/01/2014

Unemployment decreased by a further 167,000 bringing the jobless total down to 7.1 per cent. The UK is now only a fraction off the 7 per cent target that governor Mark Carney announced last August could trigger interest rate hikes.

That translates into 2.32 million in Britain still unemployed at the end of November according to the Office for National Statistics.

This was the largest quarterly drop for more than sixteen years and amounted to 24,000 less Britons receiving Jobseeker's Allowance benefits.

Now with the jobless falling so sharply, people with mortgages and loans all across the country are feeling much more nervous about an interest rate increase. But this may not necessarily be the case.

The notes recorded from January's Bank of England's Monetary Policy Committee meeting reveal that the BOE are not under any pressure to increase interest rates.

It stated that

it was likely that the headwinds to growth associated with the aftermath of the financial crisis would persist for some time yet.

Inflation has gone down to 2 per cent at last which was their aim, plus the average salary had increase by nearly one per cent year on year. So in theory. it should help the wage earner put more 'real' money into their pocket.

The ONS have also released figures showing that the UK government's public sector borrowing was down last month by around fifteen per cent. They estimated £12.1 billion, compared with £14.2 billion at the same time in the previous year.

Annual borrowing was now down by nearly five per cent on 2012-13 and stands at £96.1 billion.

But the ONS do make it clear that these figures may need to be revised at a later period.

So unemployment falling so quickly along with recent economic growth figures has helped lower government borrowing.