This morning the Pound/Euro rate fell to €1.0930 however has now recovered back to around €1.10:
UK Employment figures help the Pound
As I mentioned in my report yesterday, this morning the UK released its latest employment data. The numbers were better than expected, helping to push Sterling higher against the Euro. Wage growth has picked up to above 2%, getting closer to the inflation number of 2.6% which is encouraging. Overall unemployment fell to 4.4%, the lowest since the 1970’s which again is another positive indicator showing the underlying health of the UK economy is robust.
Sterling likely to remain low for some time
However, as regular readers will know, the Pound is under pressure due to uncertainty about our future relationship with the EU. In my view, the UK have tried to make progress with regards to citizen rights, the Irish border, and future customs arrangements, however the EU side seem unwilling to actually negotiate in these ‘negotations’ and this does not bode well for a swift resolution to the immediate hurdles. Until the EU actually try to come to an agreeable solution, they have said that they will not discuss future trade arrangements, and it’s this lack of clarity with regards to how the UK and EU will trade in the future that is keeping the Pound low. In the short to medium term, I think this is likely to remain the case.
Tomorrow we will see UK Retail Sales data, which is a good barometer of overall economic growth. With the summer being rather wet and miserable, it’s likely the numbers will not be good as poor weather usually keeps consumers indoors!
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