The UK released positive employment data this morning. Unemployment is down to 3.5% which is the lowest rate sine 1974 and suggests a strong employment market. Average earnings came in at 5.4% better too which was ahead of expectations. However it must be noted that this still trails inflation significantly meaning the gap between prices and earnings is widening. The number of vacancies fell also indicating the job market may be at it's highest it's going to reach.
This had little effect on Pound rates though. The positive rhetoric from politicians looks to be played out now. Even the Chancellor moving his plans forward to 31st October seems to hold little weight. GBP/EUR and GBP/USD are both looking troubled right now. What could be hampering things is the IFS's damning report that contradicts Kwasi Kwartengs tax cuts. In order to offset the (up to now unevidenced) tax cuts the IFS is suggesting he will need to make £60 billion worth of spending cuts to offset the lower revenue. Sounds a bit like taking off Peter to feed Paul.
Today sees speeches from the ECB and the BoE. However it looks like the big news is at breakfast tomorrow when the UK releases its GDP numbers, manufacturing and services data and trade balance. Big morning tomorrow. Analysts are predicting month on month contraction of -0.1% for GDP.
Today’s Economic Calendar
EUR: 13:45 ECB's Philip Lane Speech
EUR: 19:00 ECB's Philip Lane Speech
UK: 19:00 BoE's Jon Cunliffe Speech
UK: 19:35 BoE's Governor, Andrew Bailey, Speech
UK: Wednesday 07:00 GDP Data
UK: Wednesday 07:00 Manufacturing and Services
UK: Wednesday 07:00 Trade Balance
As ever we look forward to keeping you in the loop and look out for our next update.
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