Repeat after me, “It’s not a target, it’s not a target”. Well try telling the market that the BOE’s 7% threshold isn’t a target. The pound has gotten another boost and sterling is running away with it once more.
EUR/GBP has been battered down through 0.8200 to 0.8181. GBP/JPY has tacked on nearly 90 pips to 172.63. Cable is up to 1.6548 now.
On the face of it it’s a good report but I’m wary of those part time numbers and the fact that it was the time of year that this boost has come. The claimant count was lower than expected and that should take a little of the shine off though again, it’s still going in the right direction.
Focus now will be on February’s inflation report as Carney & Co will be quizzed hysterically on forward guidance and what today’s numbers mean for interest rates. The market will be straining on the leash no matter what they say.
Wages were up but not of any size that we need to worry about on the inflation front. Earnings are still fairly weak which may still add a drag on the recovery.
Next months labour report will be all the more important. If these gains are carried over then we can say that we really do have a strong recovering labour market. If they all reverse it could put a big dent in this current sentiment. You all know I’m a ‘Positive Peter’ when it comes to the UK but I’m very much leaning towards caution next month. That doesn’t matter right now as it’s party time in good old Blighty. Pip pip!
