During European trading the Pound rallied in response to significantly better-than-forecast UK employment data, and the GBP to Euro, GBP to USD pairings advanced in the aftermath of the reports’ publication.
While economists had expected the UK unemployment rate to fall in the three months to February (edging down from 7.2 per cent to 7.1 per cent) the jobless level shocked everyone by dropping to a 5-year low of 6.9 per cent.
The unemployment rate is now below the 7 per cent target initially set by the Bank of England as the threshold for raising interest rates.
According to the figures the UK added 239,000 positions in the three months to February, over twice the 90,000 gain expected.
Although weekly earnings excluding bonuses climbed by less-than-forecast (gaining 1.4 per cent rather than the 1.7 per cent projected) average weekly earnings rose by 1.7 per cent – meaning that pay growth has caught up with inflation for the first time in four years.
IBT quotes one industry expert as saying of the result; ‘Today’s figures will be another boost for the government […] However, this is short-termism at its worst. On the surface we are seeing more people in work, but this is an increase in part time jobs and self employment, not in full time roles. The government need to show clear incentives for private sector employers to hire on full-time contracts to create meaningful job market growth’.
But today’s data does add to the case for the Bank of England increasing interest rates sooner rather than later, so the Pound surged against the ‘Greenback’ and Euro.
Sterling jumped to 1.68 against the US Dollar and extended gains against the Euro as consumer price inflation in the Eurozone was shown to have slowed by more than anticipated.
The Eurozone’s consumer price index increased by 0.9 per cent in March month-on-month rather than climbing the 1.0 per cent expected.
The Pound also posted impressive gains against the Australian and New Zealand Dollars.
Although there is little in the way of additional UK news before the weekend, today’s impressive employment report could keep the Pound buoyed across the Easter break.
Pound (GBP) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,US Dollar,1.6806 ,
Pound Sterling,,Euro,1.2139,
Pound Sterling,,Australian Dollar,1.7920,
Pound Sterling,,New Zealand Dollar,1.9508 ,
US Dollar,,Pound Sterling,0.5952,
Euro,,Pound Sterling,0.8238,
Australian Dollar,,Pound Sterling,0.5570,
New Zealand Dollar,,Pound Sterling,0.5122,
[/table]
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