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U.K. unemployment rate drops to 7.1% in November; pound spikes

Published 01/22/2014, 04:35 AM
Bank of England Governor Mark Carney

Investing.com - The U.K.’s jobless rate fell more-than-expected in November to hit the lowest level since April 2009, reinforcing expectations the Bank of England may raise interest rates sooner than previously anticipated, official data showed on Wednesday.

In a report, the U.K. Office for National Statistics said that the rate of unemployment ticked down to 7.1% in November from 7.4% in October. Analysts had expected the jobless rate to fall to 7.3%.

The Bank of England previously announced plans to keep interest rates on hold at record lows as long as the U.K. unemployment rate remains above 7%.

The report also showed that the number of people claiming unemployment benefits in the U.K. declined less-than-expected in December,

The claimant count fell by a seasonally adjusted 24,000 last month, compared to expectations for a decline of 35,000 people. November’s figure was revised to a drop of 34,300 people from a previously reported decline of 36,700.

Meanwhile, the average earnings index rose by a seasonally adjusted 0.9% in November, compared to expectations for a 1% increase, after rising by 0.9% in the previous month.

Following the release of the data, the pound spiked higher against the U.S. dollar, with GBP/USD rising 0.25% to trade at 1.6517, compared to 1.6466 ahead of the data.

European stock markets held on to modest gains. London’s FTSE 100 inched up 0.1%, the EURO STOXX 50 tacked on 0.25%, France’s CAC 40 added 0.2%, while Germany's DAX advanced 0.1%.

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