UK Unemployment Falls To 7.6 Percent
By DANICA KIRKA and PAN PYLAS
LONDON (AP) a¿¿ British homeowners and businesses could face a rise in interest rates sooner than expected as the economic recovery is gathering pace, the Bank of England indicated Wednesday.
Governor Mark Carney said there were improvements across the board, with unemployment dropping quicker than anticipated a¿¿ to 7.6 percent, according to the latest figures.
"For the first time in a long time, you don't have to be an optimist to see the glass as half full," he said as he presented the central bank's quarterly economic report.The market took that as an indication that interest rates will rise sooner than expected. Britain's main stock index, the FTSE 100, fell 1.2 percent, the worst performer in Europe, after Carney's comments. Even though the markets moved, investors don't expect a rise in interest rates for months, if not years. That's because the bank has vowed not to consider raising its record-low interest rate until unemployment falls below 7 percent. The latest forecasts suggest the target may be reached by the third quarter of 2015 rather than the original guess of 2016. Carney went out of his way to say the central bank would not act prematurely. "It is welcome that the economy is growing again, but a return to growth is not yet a return to normality," Carney said. "Nearly one million more people are out of work than in the years before the financial crisis." He also said that hitting the 7 percent threshold would not necessarily trigger an increase in rates. He chuckled at the notion change would be that sudden, and said the bank would make it clear ahead of time what its intentions were, so as to not catch consumers off guard. "We like to talk," Carney said with a smile.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV