Pound Strengthens After Positive UK Jobs Data
The pound sterling (GBP) strengthened against most major currencies on Tuesday (August 12th) following the release of positive UK jobs data for the three months to June. The Office for National Statistics (ONS) reported the creation of 239,000 jobs in the second quarter, well above the 134,000 in the previous period. This data represents a significant recovery from the previous trend, when companies tended to hold back hiring due to the increase in social security contributions to 15%.
The ILO unemployment rate was recorded at 4.7%, in line with expectations, while July unemployment benefit claims fell by 6.2,000, against expectations of a 20.8,000 increase. Wage growth moderated, with average earnings without bonuses rising 5% year-on-year, as expected, and earnings including bonuses growing 4.6%, slightly below expectations of 4.7%.
Solid labor market performance gives the Bank of England (BoE) room to maintain its "gradual and cautious" monetary easing stance after cutting interest rates 25 basis points to 4% last week. This week, the market will also be watching the preliminary release of second-quarter GDP and June factory production data, due Thursday, for additional clues on the direction of the UK economy.(ayu)
Source: Newsmaker.id
