UK employment claims fall
The United Kingdom’s Office of National Statistics published the first employment report, which includes the period since the Brexit vote, on August 17, 2016. The report indicated a fall in the number of people who claimed unemployment-related benefits. The count fell by 8,600 in the quarter ending in June—compared to forecasts of a rise of 5,200. The employment rate came out at 74.5%—the highest level since the reports started publishing in 1971. This was against the market forecasts. A fall in employment numbers after the Brexit vote was expected to have a negative impact on the economy. Among other major data, the average earnings rose to 2.4%, while the unemployment rate remained unchanged at 4.9%.
How will the Brexit vote impact employment data?
Market participants, including the BOE (Bank of England), thought that the Brexit vote was a risky event. They thought that it would have a negative impact on the economy. The BOE came out with more monetary easing measures to counter the risk from the Brexit vote. For more details on the monetary policy release, read BOE Governor Mark Carney Set the Doves Free after 7 Years. With second quarter employment numbers coming out better than expected, the forecasts for the next employment figures are expected to go down significantly. This could be partially offset by the BOE’s easing measure.
Impact on the market
Looking at ADRs (American depositary receipts), Barclays (BCS) fell by 0.35%. On the other hand, HSBC Holdings (HSBC) rose by 0.64% during the day, while Royal Bank of Scotland Group (RBS) rose by 0.30%.