UK employment data decorated the opening of the European session with encouraging readings in the last quarter of 2021.
Most recently, the Office for National Statistics (ONS) reported the UK unemployment rate remained stable at 4.1% in the three months to December, unchanged from previously recorded figures. This in turn confirms that labor market conditions are stronger until the end of 2021.
However, the UK economy saw a 38,000 job cut in the period October to December, making it the biggest drop since February last year when the country was under Covid-19 sanctions.
Meanwhile, the ONS also noted that fixed income fell by 0.8%, indicating that living standards in the country fell at the fastest rate in almost eight years.
The average salary excluding bonuses increased 3.6% from the previous year, less than the increase in consumer prices. In line with inflation, income fell 1.2% making it the biggest decline since 2014.
This is seen to increase the pressure on UK citizens when energy bills and taxes are expected to soar in April.
Following that, investors now expect that the Bank of England (BOE) will raise interest rates by 50 basis points to 2% by the end of the year in the fight against the inflation surge.
The pound, however, failed to find support from this reading, seeing it continue to trade under pressure due to the geopolitical risks of Russia and Ukraine that continue to plague the market.
