This morning UK employment and wage growth data was released, and the numbers have helped the Pound rise. GBP/EUR is at €1.1370 and GBP/USD is at $.2915.
Most of the employment data was roughly as expected. 2 measures beat forecasts however. Firstly we saw the Unemployment rate fall to a record low of 4%. We also saw the average earning s measure rise more than expected to 3.4%. As the numbers beat forecast, Sterling duly strengthened as a result. Employment levels are now the highest since 1971, showing how strong the UK economy actually is, despite the doom and gloom on the news.
Pound also stronger on Brexit hopes
The Pound has also held on to it’s recent gains in the midst of the Brexit crisis. Teresa May’s plan B looks very much like her original plan, and given that nothing has changed you would expect the Pound to be performing poorly. It certainly looks like any new vote would still be lost. I think there are 2 reasons the Pound is holding o
1 – Markets think that a No Deal brexit won’t happen. Despite the fact that not much has changed, it’s expected that either Brexit will be delayed, or a new referendum will happen, or parliament will take control of the process. Whatever actually happens, nobody expects the UK to leave without a deal, and that’s helped Sterling.
2 – Markets expect that the EU will make an 11th hour concession with regards to the ‘Back Stop’, allowing parliament to vote through the deal, and avoid a Hard Brexit.
Will Pound/Euro rates rise or fall?
Regardless what will happen with Brexit in the coming weeks, the good news for Euro buyers is that the GBP/EUR rate is more than 3% higher than it was a few weeks ago. There is still a risk of rates dropping back away though. There are rumours that up to 40 members of the government could resign next week should MP’s be refused a free vote on avoiding a no deal. This political uncertainty could send the Pound/Euro rate crashing back to €1.10 again.
Those that wish to take advantage of the current levels should contact us for a quote to see what rate we can offer you.