The Daily Update: BoE / Non-Farm Payrolls

Yesterday the Bank of England’s Monetary Policy Committee (MPC) held interest rates steady, unanimously voting to keep its main lending rate at 0.1% and maintain asset purchases at £895 billion. ‘The Committee does not intend to tighten monetary policy at least until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2% inflation target sustainably’ the MPC said. The committee expects inflation to return to about 2% in the coming months, however they added that ‘Inflation expectations remain well anchored’. Also, the Bank said it now saw growth of 7.25% this year, well up from the previous forecast of 5%, which would be the strongest since 1941.

The Bank's unchanged policy comes as a monthly report on jobs produced by the Recruitment and Employment Confederation and KPMG showed recruitment activity is rebounding at the fastest pace in 23 years. Temporary hires were also close to historic highs, expanding for a ninth straight month.

Today we also had April’s Non-farm Payroll numbers. The market estimates before the figures were for 1 million jobs added, an unemployment rate of 5.8% and participation rate of 61.6% before the figures.
The actual number of jobs added was only 266k with the previous month’s figure revised down to 770k from 916k. The unemployment rate rose to 6.1% versus the prior month’s reading of 6% and the participation rate rose to 61.7%.