In part two of the week’s three-pronged investigation into ‘just how bad do UK consumers have it?’ the markets gets a look at the latest round of jobs data.
With inflation at a 5 year high of 3.0% in both September and October, it’s more than likely that this Wednesday’s figures are going to show an increase in the already ugly gap in real wages. For the 3 months to the end of September wage growth (including bonuses) is forecast to fall from 2.2% to 2.1%, a drop that only exacerbates the python-like inflationary squeeze currently being put on people’s wallets. As for the rest of the jobs report, the claimant count change is set to jump from 1.7k to 2.0k month-on-month, with the unemployment rate unchanged at 4.3%.
None of this is great news for the pound. Yet sterling has seen a bit of a split performance in the last few days. Against the dollar, which is fretting over the Republican tax reforms, the pound has been able to climb towards €1.318. Against the euro, however, the currency’s political, Brexit AND inflation woes have dragged it to its worst price since the middle of October, with this morning’s 0.1% to 0.2% dip sporadically taking it below €1.115.
As for the FTSE, even with the pound’s mixed performance the UK index is looking pretty damn dog-eared. A red open from its oil and mining stocks has helped drag the FTSE 0.2% lower, leaving it below 7400 at its worst price for over 6 weeks.
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