Unemployment Fall Means Interest Rate Increase Looms

Unemployment Fall Means Interest Rate Increase Looms.

The Office for National Statistics (ONS) has released its latest unemployment figures to September confirming that unemployment has fallen to 7.6%.

An decrease in those registered unemployed fell by 48,000 from July to 2.47 million people.

Comment

This is good news for the economy and a sign that employers are recruiting and expanding.

The none headline news is to not forget that the Governor of the Bank of England, Mark Carney, confirmed in the summer that the Bank of England has now amended its interest rate setting policy from benchmarking to inflation to benchmark to the unemployment rate.

The Bank of England policy is now to consider interest rate increases when unemployment falls to 7% and below.

We suggest that this may mean interest rate increases towards the middle of back end of next year.  

Interest rate increases may mean good news for savers and pensioners living off their interest but for those with mortgages, particularly tracker mortgages, you may wish to start budgeting for higher property costs. 

Use our mortgage calculator to do a quick check on what your mortgage payments could rise to if we were to receive a 0.5% - 1.0% rise.