Pound Dollar & Pound Euro Exchange Rates Jump On BoE Minutes

Modified: Wednesday, 17 July 2013 13:22 BST - Written by John Cameron

STORY LINK Pound Dollar & Pound Euro Exchange Rates Jump On BoE Minutes

This morning’s session brought a double boost for the Pound Sterling, with the news that the overall level of UK unemployment had dipped by 57,000 during the three months to the ends of May and an apparent change in tack from the UK’s central bank. The jobs data left the total number of unemployed workers in Britain at 2.51m. The numbers caused the Pound to gain ground against across the board, sending the Pound to euro exchange rate up to as high as 1.1584 during early trading today. The pair had been labouring down in the 1.1400s as recently as yesterday afternoon.

However, the UK labour market figures were not exclusively Sterling-positive, revealing that almost 1m British adults had been out of a job for over a year. Several studies undertaken in recent years have found that potential employees who have been without a position for over 12 months often lose their skills and have difficulties in adjusting to the workplace if they find a job again. With such a potentially high level of residual unemployment the future for the UK economy may be less rosy than today’s jobs figures initially suggested.

Meanwhile, the minutes of the latest Bank of England monetary policy committee meeting, held in the first week of this month, provided the Pound with a real fillip. The memos revealed that all nine members of the MPC had voted against an increase to the UK’s £375bn Quantitative Easing programme. The MPC voting pattern has invariably been 6-3 against more QE during the months leading up to this month, but a change of guard at the helm of the BoE appears to have elicited a pronounced policy shift. Erstwhile Chairman of the Bank of England Mervyn King had consistently voted in favour of an increase in QE, but his successor Mark Carney has immediately adopted a diametrically opposed view of Britain’s asset purchasing scheme, voting ‘no’ to an extension to the programme at his first meeting. The Pound has registered strong gains as a result, sending the Pound to US Dollar exchange rate (currency : GBP USD) up to 1.5228 a short time ago.

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