Belfast Telegraph

Jobs raise interest rate questions

By David Elliott

Although tempted to use this space to have a rant about inadequate, nay inept customer service from the latest service provider to make me want to pull my hair out, we'll have to settle on jobs.

They're a part of the economy which has managed to wrestle from the central bankers at the Bank of England an emotion not normally associated with their monthly meeting: surprise.

As the minutes of the last monetary policy committee get together revealed, they were taken aback by the strength of the labour market at a time when economy is still dusting itself down.

That raises an interesting position for new governor Mark Carney who's pledged not to raise rates until unemployment falls to 7%, a figure he doesn't expect to be hit until late 2016.

The way things are going, the 7% level could be hit well before then and Mr Carney could be forced to act before he's ready.

And when it comes to Northern Ireland, things are even more surprising.

Us doom mongers had been predicting that the biggest dent to our future economic prosperity was the potential for the central bank to lift interest rates before the Northern Ireland economy has even got to its feet.

Instead, we're actually looking more healthy than the rest of the UK when it comes to jobs with unemployment at 7.3%.

But does than mean our economy is back to health?

Mr Carney seems to think so, although anecdotal evidence would tell you otherwise.

And there in lies the rub: unemployment isn't a pure indicator of economic health.

So let's hope Mr Carney keeps his foot of the interest rate gas.

Belfast Telegraph


From Belfast Telegraph