Market insights

Market Comment - 13th December 2022

Good morning,

Unemployment in the UK came in at 3.7% this morning. There were an extra 30.5k unemployed added to the numbers in November. Also the average earnings are still sitting well below inflation at 6% growth meaning the gap between earnings and cost of living is widening.

Whilst this information seems to be a little off the mark for the UK economy it's had a slightly positive effect for Pound rates. A potential reason for this happening is the contrary nature of difficult times in the economy. The worse things are the more likely central banks will step in to help shore things up. This was prevalent in the credit crisis and again during the pandemic. As the UK teeters on potential recession this is a time for the Bank of England to roll up its sleeves and help out. Unfortunately a lot of the usual levers are still pushed into the on position since the credit crunch meaning there's not a lot of wiggle room for the BoE.

German inflation numbers came out today also at an eye watering 11.3% indicating it's not just the UK that's facing these difficult times.

Business news is all about industrial action. Rail services for the rest of the month are broadly either non existent or diminished. Throw into the mix the mail strikes and the nurse strikes and it could be a tough old month across the board. Luckily we managed to avoid a strike by barristers....

And hold onto your hats. We've got a big 24 hours ahead. First out of the traps are the US inflation numbers. Depending on which variant you're tracking the prediction is for 7.3% year on year growth. The UK releases its numbers at breakfast tomorrow. Analysts are expecting 10.9% year on year increase.


Today’s Economic Calendar

US: 13:30 Inflation Numbers

AUS: 22:30 Reserve Bank of Australia's Philip Lowe Speech

JPN: 23:50 Tankan Large Manufacturing Data

UK: Wednesday 07:00 Inflation Numbers


As ever we look forward to keeping you in the loop and look out for our next update.

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