The pound has surged to a new 19-month high against the Euro after the Bank of England’s April policy meeting showed that there will not be an increase in Quantitative easing this month. The released minutes show that only one member of the committee wanted to increase the amount of QE. David Miles voted for an increase of £25bn, which would take the total QE to £350bn. As a result the Pound has strengthened against the 16 most actively traded currencies. News of the 8-1 split sent the pound up a cent against the euro to €1.2218.Its highest level since August 2010.
The news has added to the optimism that has emerged over the UK economy in recent weeks. There is now speculation that the Monetary Policy Committee will not approve any further asset purchases this year and modest growth is expected for the first and second quarters.
Unemployment figures for the country were also released this morning and show a surprisingly good figure. The number of people unemployed fell by 35,000 in the three months to February to around 2.65million meaning that employment fell from 8.4% last month to 8.3%. However people claiming job seekers allowance rose by 3,600 in March taking the number of claimants for benefits to 1.613million.
The UK employment minister Chris Grayling has praised the latest figures saying; “Today’s figures are a step in the right direction but we still have a long way to go. We are pushing ahead with our strategy to promote investment and new jobs in the private sector and support people currently without work to take up those jobs. I am particularly encouraged that overall employment is now growing despite reductions in the public sector.”
The Pound is trading up towards 1.60 versus the U.S Dollar but strong resistance is keeping Sterling below the psychologically significant mark, whilst the push above 1.22 versus the Euro is the Pound’s strongest performance since 2010.