Commenting on today’s announcement from the ONS of the latest UK employment figures, which have seen unemployment levels fall by 167,000 to 7.1 percent of the working population, Andrew Smith, Chief Economist at KPMG in the UK, said:
“Since launching Forward Guidance, the Bank of England has been at pains to point out that the 7% unemployment threshold is not an automatic trigger for a tightening of monetary policy but rather the signal for a review of the policy stance – and the minutes of this month’s MPC meeting state that members saw no immediate need to raise rates ‘even if the 7% unemployment threshold were to be reached in the near future’. Indeed, given that inflation has finally come down to target and that the economic recovery is still in its early stages, it would be perverse to do so and as unemployment falls though 7%, the Committee is more likely to change its guidance than raise interest rates.”
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Notes to editors.
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with approximately 11,500 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2013. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 155,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.