UK labour data surprises and boosts Sterling.. |
The Pound is making moves against all G10 currencies today after UK data released earlier shows a stronger than expected labour market. The headline is that the unemployment rate actually fell (3.9% v 3.8%), when economists had predicted an increase to 4%. The jobless rate currently stands at the lowest since April 2023 for 2 main reasons.. First, businesses have preferred to retain their staff and wait for conditions to improve, instead of losing some of their workforce and rehire once a recovery is on the horizon. Second, the BoE has not gone overboard with rate hikes during the cycle which has meant high inflation has subsided and the economy hasn't completely crashed. Wages also caused a stir on release as even though they were down by a fair amount (5.8% v 6.7%), they were above consensus (5.6%). Markets deem these figures as being consistent with UK interest rates staying at current levels for longer and this means a stronger GBP. £-€ is trading at the highest point since August 2022 and £-$ is up over 1% in the last week. |