November 16, 2021

Some Ask Why GBP Soared? It's Because of Him!

 The UK job market strengthened after data published at the start of the European session showed the unemployment rate continued to decline.

According to data released by the UK’s Office for National Statistics (ONS), the unemployment rate fell to 4.3% in the three months to September from 4.5% previously recorded.

This is also the lowest level ever recorded since July 2020 and better than the market expects to shrink to 4.4%.

The pound rose following this encouraging reading, adding to the reason for the Bank of England (BOE) to act to raise interest rates in line with growth in the job market.

At the time of writing, the pound is trading higher at around 1.34700 against the US dollar, rising from the lowest level recorded since December 2020.

Meanwhile, data also showed the number of employees in the business sector increased by 160,000 to 29.3 million, 0.8% higher than in February before the Covid-19 outbreak hit.

The central bank is still reluctant to raise interest rates on the grounds of wanting to assess first the impact of the government's cessation of employment subsidy schemes on the labor market and inflation.