Positive UK data, but the Pound moves lower
Plenty to get through today..
UK jobs data for August showed the total number of payrolled employees is above pre-pandemic levels. The number of employed people increased by 183,000 in July with the unemployment rate dropping to 4.6%. This is a very positive picture ahead of the furlough scheme ending this month.
UK inflation data for August, showed the largest ever recorded increase YoY and economists have warned more surprises are still to come this year. The MoM figure easily beat forecasts and inflation is set to break through the BoE's 4% 2021 target in October. This would be significant, as persistent high inflation would have to be dealt with by an interest rate hike. Good news for £.
Investment banks Goldman Sachs & Morgan Stanley, have today gone against the recent negative forecasts on the Pound, by announcing a bullish stance. Both believe a rate hike is possible this year, although this has a small chance of happening. Still, it's the first time in a while two heavyweight names have reported positively on GBP's value for year-end.
The reason for some £ weakness this week comes from elsewhere with the Delta variant still causing concern and economic weakness in China especially. The stock market has also stalled of late and the overall economic 'slowdown' is limiting any Sterling progress. £-$ rates did jump to its highest point in 5-weeks yesterday after poor inflation data out of the US, but those gains didn't last long. £-€ rates are trading at a 1-week low currently.
Boris Johnson's winter covid-19 plan was a bit underwhelming with no mention of a nationwide lockdown. Instead, it was confirmed booster jabs are now available to the over 50's and vulnerable, working from home and mandatory mask wearing could be brought back. Despite dire warnings that the UK is set for a tough winter with the virus, week-on-week cases continue to fall for now.