The number of people unable to find full-time work appears to have peaked. Photograph: Getty Images.
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New employment data suggests an approaching uplift for the UK economy

The decline since November 2013 was the largest 3 month fall since 1992.

The wisdom of the Bank of England’s decision to move the goalposts on forward guidance, away from the single metric of the ILO 3-monthly average unemployment rate to a more holistic range of economic indicators, has been brought into stark relief by the latest employment data, released on 16 April.

The headline rate fell unexpectedly to 6.9 per cent, its lowest level since Feb 2009, from 7.2 per cent last month, and well below the expectated 7.1 per cent. The more contemporaneous Claimant Count Rate, fell to 3.4 per cent in March from 3.5 per cent in February, presaging further falls in the ILO rate next month and taking this measure to its lowest level since November 2008 - the pit of the financial crisis.

The unemployment rate for the single month of February was 6.6 per cent, meaning that the decline since November’s 7.4 per cent was the largest 3 month fall since 1992, and an unemployment rate of 6.6 per cent is getting uncomfortably close to the Bank of England’s own NAIRU estimate of 6 to 6.5 per cent, so that one of her new favoured indicators, the amount of labour slack in the economy, may be disappearing rather quickly.

The last BOE Quarterly Inflation Report, in February, forecast unemployment at 6.9 per cent at the end of Q1. Well, we’re already there and sure to be below that if March’s single month reading stays below 7.0 per cent.

However, there are pockets of less impressive news buried within the report. Average Weekly Earnings for February, now very closely watched by the BOE as a leading indicator for inflation, disappointed a little at 1.7 per cent, up against an expectated 1.8 per cent, but were still up 1.4 per cent in January - and I would expect further increases over the coming months; for the first time in nearly six years, weekly earnings have finally overtaken inflation. There is still some way to go however; as at Q4 real wages were still 6.5 per cent below their pre-crisis peak. The average work week fell, somewhat inexplicably, from 32.2 hours to 32.0, which won’t impress the Monetary Policy Committee.

Finally, although the rise in employment, at 239k, and in the participation rate, from 63.6 per cent to 63.8 per cent, both looked like great news, one can pick holes and point to the composition of the 239k gain; only 45k were full-time employee jobs and self-employment grew by 146K in the three months to February. However, it looks like number of people working part-time because they could not get a full-time job has peaked, which is very healthy.

All-in-all, these statistics alone, nor the recent raft of other encouraging indicators such as house prices, PMI’s, Industrial Production and Retail Sales, will not yet be enough to break the MPC’s unanimity when it comes to keeping rates at 0.5 per cent, but if the trend continues - with annualized growth approaching 4 per cent, then the minutes of June or July’s MPC meeting could make very interesting reading.

Chairman of  Saxo Capital Markets Board

An Honours Graduate from Oxford University, Nick Beecroft has over 30 years of international trading experience within the financial industry, including senior Global Markets roles at Standard Chartered Bank, Deutsche Bank and Citibank. Nick was a member of the Bank of England's Foreign Exchange Joint Standing Committee.

More of his work can be found here.

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Lord Sainsbury pulls funding from Progress and other political causes

The longstanding Labour donor will no longer fund party political causes. 

Centrist Labour MPs face a funding gap for their ideas after the longstanding Labour donor Lord Sainsbury announced he will stop financing party political causes.

Sainsbury, who served as a New Labour minister and also donated to the Liberal Democrats, is instead concentrating on charitable causes. 

Lord Sainsbury funded the centrist organisation Progress, dubbed the “original Blairite pressure group”, which was founded in mid Nineties and provided the intellectual underpinnings of New Labour.

The former supermarket boss is understood to still fund Policy Network, an international thinktank headed by New Labour veteran Peter Mandelson.

He has also funded the Remain campaign group Britain Stronger in Europe. The latter reinvented itself as Open Britain after the Leave vote, and has campaigned for a softer Brexit. Its supporters include former Lib Dem leader Nick Clegg and Labour's Chuka Umunna, and it now relies on grassroots funding.

Sainsbury said he wished to “hand the baton on to a new generation of donors” who supported progressive politics. 

Progress director Richard Angell said: “Progress is extremely grateful to Lord Sainsbury for the funding he has provided for over two decades. We always knew it would not last forever.”

The organisation has raised a third of its funding target from other donors, but is now appealing for financial support from Labour supporters. Its aims include “stopping a hard-left take over” of the Labour party and “renewing the ideas of the centre-left”. 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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