The EUR GBP exchange rate was lower by 0.14% on Tuesday after the latest UK employment figures topped expectations with a record rise in payroll additions and a record for vacancies. The numbers are a boost for the government just two weeks ahead of the end of the furlough scheme.
The EUR to GBP rate is now lower for a fifth consecutive day as sterling reasserts its economic advantage over the eurozone and trades at 0.8520.
UK employment back at pre-virus levels
UK employment levels are back to their pre-coronavirus lockdown levels, according to the latest statistics from the ONS.
The ONS revealed the country added 183K jobs in the three months to July, which beat expectations for a 178K improvement and was double the 95K recorded in the three months to June.
The unemployment rate in Britain dropped to 4.6%, from 4.7% in June and the numbers are a boost for the government ahead of the furlough’s completion on September 30th.
“The pound has been bolstered this morning by another stellar set of labour market data increasing the conviction level,” said the FX trading desk at JP Morgan in London. “Nothing here to derail our more positive view on the pound.”
The number of job vacancies in June to August 2021 was over 1 million for the first time since records began and this will be driven by the furlough scheme, worker displacements, and other staff shortages in areas such as haulage. The scale of vacancies will help when the furlough scheme comes to a close.
“The latest data reveal two positive labour market milestones – the number of employees on the payroll reached pre-pandemic levels in August and the number of vacancies surpassed one million for the first time since records began in the three months to August,” said economists at PwC.
Boris Johnson delivers his winter coronavirus plan
UK Health Secretary Sajid Javid has revealed the Government’s plan for how it will tackle the Coronavirus this winter.
The measures include face masks being recommended in public indoor settings again, with other contingency measures that could see vaccine passports introduced and working from home advice. The Health Secretary’s notes came ahead of a televised address from Boris Johnson later in the day.
The announcement comes with a rare dose of optimism from the SAGE scientific advisory council.
“The future trajectory is increasingly unlikely to reach the peak of the January 2021 wave,” they said.
The group’s minutes added the UK is now entering a “period of uncertainty”, with key questions yet to be answered on how much immunity wanes after vaccination and how much the reopening of schools and workplaces will drive case numbers. It is expected to take “several weeks” to see the full impact of those changes.
The pound sterling is on the front foot again as virus numbers level off and the next data is tomorrow’s core inflation reading. Today’s employment numbers coupled with a higher inflation number would put pressure back on the Bank of England to consider a rate rise or stimulus drawdown.