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Instant View - UK jobless claimant count falls, BoE remains split on stimulus

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(Globalpost/GlobalPost)

LONDON (Reuters) - LONDON, April 17 (Reuters) - The number of Britons claiming unemployment benefit fell unexpectedly in March but the broader measure of unemployment rose, official data showed on Wednesday.

Minutes of the Bank of England's April policy meeting released at the same time showed that the central bank remained split on whether to restart its asset purchases to boost Britain's economy.

ANALYSTS' VIEWS

DAVID OWEN, JEFFERIES

On jobs:

"The key takeaway from this is the weakness in employment."

"Part-time employment obviously fell back sharply...in the month and although full-time employment actually rose there was a net contraction in employment, and average earnings was exceptionally weak driven in large part by bonuses."

"But you've got this view now that the labour market is no longer strengthening at the rate that we were seeing. It's a very mixed picture because in this we've got total hours worked up, and it seems to be driven by younger people who are entering the labour market who can't find work, so you've got this decline in employment."

"From the MPC's point of view if this is a trend that continues obviously that suggests the need to do more."

DAVID TINSLEY, BNP PARIBAS

On jobs:

"The jobs data is certainly on the softer side, but it looks to me as though there was a strong patch in the labour market in the final two months of last year, and really that's the anomaly. The underlying picture, as far as the labour market is concerned, is one of modest improvement. So I wouldn't get too worried about the headline rise in the ILO unemployment rate, it could have been worse."

DAVID BROWN, NEW VIEW ECONOMICS

On minutes:

"The tone of the MPC minutes suggest that the BOE may have entered into the semantics of transition. The UK might not be in recovery mode yet, but the intonation seems to suggest the economy is over the worst and out of casualty.

"The key is how much more QE medicine the economy needs to speed up the healing process to get the economy back on the road to fuller recovery. That debate probably awaits the arrival of incoming BOE governor Carney to see what he has in his monetary medicine bag.

"The argument posted by some members about the risk that more QE might pose to increased inflation risks is nothing more than a foil. In the current climate, the BOE's inflation mandate is set aside while the risks of another dip into recession lurk in the forefront. King's support for a further QE extension simply keeps the easing seat warm for Carney when he comes on board."

ALAN CLARKE, SCOTIABANK

On jobs data:

"Very disappointing that employment was down in the last three months. I had the lowest forecast in the market by a country mile and even I proved to be too optimistic.

"The ILO (jobless) rate rose from 7.8 to 7.9 percent, I think that's the focus. A 5,000 to 10,000 drop in unemployment in the payment count measure - that measure does tend to get distorted by various government policy changes, which is why I look at the ILO.

"It's not a disaster, but a lot of the froth and really good news we had over the last year on jobs is becoming exhausted, which shouldn't be a surprise when there is not much growth around."

PETER DIXON, COMMERZBANK

On jobs data:

"Very erratic numbers. The fact that the claimant count unemployment numbers fell perhaps a bit more than consensus expectations should be taken with a pinch of salt. Looking at the underlying numbers we did see a small rise in the unemployment rate it's true.

"I think what was slightly concerning was that over the three months to February we saw a small decline in employment. That I think is going to be a cause for concern because over the course of the last few months most policy makers have said well OK the economy may be poor but at least employment's going up. If employment has levelled off then it does rather suggest that life in 2013 for policy makers is going to be very uncomfortable indeed."

On minutes:

"The voting pattern is the first thing that jumped out at me -- no changes there. Just in terms of what people are thinking, it looks like, I wouldn't say the end of the road has come for QE but there was clearly a question mark about whether it's a policy that's going to take us forward.

It looks as though, from what I can see from the headlines, suggesting possible merit in extending the FLS was one of the things Mervyn King was talking about, again I get the sense we're going over the same old ground on monetary policy.

The six people who voted against changing the policy mandate are basically saying look, it's time to let the policy that we've put in place work through and see whether it does because there's no sense in throwing good money after bad. We've almost reached a point I think where monetary policy is not going to get us out of our predicament."

VICTORIA CLARKE, INVESTEC

On minutes:

"No surprise in the vote. The governor is still pushing for more QE with the support of Fisher and Miles, but he's not gaining any traction, and our suspicion is it will stay that way until Carney takes his position in the summer. We don't see inflation pressure subsiding but we think Carney coming in will add a new impetus to the Committee to give growth one more push."

GEORGE BUCKLEY, DEUTSCHE BANK:

On jobs data:

"It's a tale of two different statistics here."

"On the claims numbers they were obviously quite positive in the sense that the last month's number got revised to an even bigger fall and we saw another fall this month."

"But on the negative side, first of all employment, which is down, the expectation was that it would rise slightly, we saw the unemployment rate go up and we've also seen very weak average earnings growth, much weaker than expected."

On minutes:

"They (BoE minutes) don't seem to me to be too surprising. The same three members voted for the same amount of QE as they did just a month ago and the previous month, which is not a surprise."

(uk.economics@reuters.com, Tel: 44 207 542 5109))

(Reporting by Christina Fincher)

http://www.globalpost.com/dispatch/news/thomson-reuters/130417/instant-view-uk-jobless-claimant-count-falls-boe-remains-split-