News from the US that the Federal Reserve has linked interest rates to the unemployment rate is unprecedented and that the current low interest rate will not be raised until unemployment is reduced to 6.5%, means that economic indicators will now be the key factors and not the calendar. Interest rates will however, only be kept low subject to a satisfactorily low inflation level below 2.5% whilst a close eye will also be kept on inflation expectations.
Across the English Channel, the Eurozone countries heard that the ECB has been granted supervisory powers over banks. As part of the agreement, the ECB will directly oversee at least 150 of the largest banks in the Eurozone and will have the authority to intervene in smaller banks if it deems necessary.
The ECB’s announcement was received very positively by the markets and it does look like a more coherent approach to the banking problems.
More good news in the UK as unemployment fell by the most in over a decade in the third quarter, as the number of people without a job fell by 86,000 to 2.51 million. . A comparison with the same period last year shows employment has risen by nearly half a million. However, the Office for National Statistics (ONS) highlighted that wage growth has not risen in line with inflation with average earnings rising at an annual rate of 1.7% versus an inflation rate of 2.7% which is making workers less well off in real terms.
The private sector has played a major role in the improving employment picture and Acumen can take some credit there too! Recruiting Alex Dunk as a trainee Financial Adviser and now qualified Financial Adviser Caroline McCarthy in 2012 show how we have responded to the increasing demand for our services – we are investing to ensure that we continue to improve our offering to clients
For those of us who find PMQs highly entertaining, yesterday’s session was typically boisterous with Ed Miliband broadly welcoming the news of the employment figures and David Cameron duly welcoming the news that he did so! Ed Balls resumed heckling and Dennis Skinner, the “Beast of Bolsover” raised a lengthy question related to the government’s proposals to introduce a law to bring the internet under the same scrutiny as telephony, as part of the fight against terrorist and paedophile activity. Whatever the concerns, the objectives are beyond argument but the draft bill now looks like it will have to be substantially re-written anyway which means it is unlikely to show up on the statute books until after the next General Election ; branding it as “The Snooper’s Charter” gives some indication of how heated the debate is likely to become as time moves on. Watch this space!