Wednesday's session was marked by UK job figures. The UK unemployment rate has fallen to 5%, the lowest since October 2005, according to official figures. The unemployment total fell to 1.67 million in the February-to-April period, down 20,000 from the previous quarter, the Office for National Statistics (ONS) said. The number of people in work rose by 55,000, with the employment rate remaining at a record high of 74.2%. Earnings, excluding bonuses, rose by 2.3% compared with last year. The rise was bigger than analysts had expected, and pay growth in April itself was 2.5%, which the ONS said was partly due to the introduction of the National Living Wage.
On Thursday UK Retail Sales data was released. The volume of retail sales in May 2016 is estimated to have increased by 6.0% compared with May 2015. The underlying pattern in the data, as suggested by the 3 month on 3 month movement in the quantity bought, increased by 1.5%. Compared with April 2016, the quantity bought in the retail industry is estimated to have increased by 0.9%.
However, the focus of the session was on BoE interes rate decision and the following Minutes. Minutes from the Bank of England’s (BoE) policy meeting revealed on Thursday that all nine members of the Monetary Policy Committee (MPC) were in favor of leaving the key interest rate at a record low of 0.5%, while the central bank also warned of further economic damage if the country decided to leave the European Union (EU), known as a Brexit, in the June 23 referendum. The BoE said it was holding the benchmark interest rate at 0.50%, in a widely expected move. The rate has been held at that record-low level since March 2009.
The central bank also said it was to maintain the stock of asset purchases financed by the issuance of central bank reserves at £375 billion. All nine MPC members also were also in favor of this decision. “This shortfall is due predominantly to unusually large drags from energy and food prices, which are expected to attenuate over the next year,” the minutes said. “Core inflation also remains subdued,” the report added. Furthermore, the BoE repeated that the possibility of a Brexit was "the largest immediate risk facing U.K. financial markets, and possibly also global financial markets."
This week markets will be looking at:
EU referendum (Thursday)
