The UK unemployment rate came in at 6.8%, so it is continuing to fall with unemployment at 6.9% the previous quarter which is the lowest level in five years. The number of people in employment hit a new record high with 30.43 million people now in work.
Also the focus was on earnings figures which largely disappointed. Average earnings (excluding bonuses) rose by 1.3% during the quarter, which is significant because it is again back below the inflation rate 1.6%. So real wages are decreasing again, in comparison to the previous quarters data which showed average wages outstripping inflation for the first time since the financial crisis.
We also had Mark Carney's quarterly inflation report. His tone was to stress that the economy is improving, however, that there is still some way to go and they are still in the early stages of the recovery. Some important things to note from the speech were that the Bank of England has increased its Economic growth forecast for next year from 2.7% to 2.9% and for this year unchanged at 3.4%.
Unemployment remains significantly above the banks current estimate for equilibrium rate. The closest Carney came to indicating an interest rate rise was by saying we have edged close to the point when the bank rate would gradually need to rise.
Early in the morning the pound has just hit its highest level against the euro in 16 months, the move was partly driven by a Reuters report, claiming European Central Bank staff are preparing a "package of measures" for next month's meeting.This includes interest rate cuts and imposing negative interest rates on bank deposits at the ECB.
Later on in the day Industrial production showed a contraction of 0.1%, this is in comparison to growth of 1.7% for the previous year on year figures.
This data underscores the fragility of the European recovery and is another factor that may force the ECB to act at their next meeting.
This morning German GDP for Q1 came in above expectations at 0.8%. However GDP figures from France and the Netherlands disappointed and the Euro weakened off.
The focus is on inflation data for both Europe and the USA today. The figures will be particularly important for the Eurozone due to Draghis comments last week that the ECB is ready to take action if inflation continues to fall. The figures are expected to show a fall from 0.9% in March to 0.2% in April.
In America, inflation is forecast to tick up slightly, increasing from 1.5% to 2% year on year.
10:00 - EUR - April Consumer Price Index expected to decrease to 0.2%
13:30 - USD - Consumer Price Index expected to increase slightly in April to 0.3%
13:30 - USD - Initial Jobless Claims expected to remain unchanged at 319,000
Daily Market Report 15/05/2014