The British Pound (GBP) was lower against all major pairings on Tuesday on the back of dire UK jobs data.
The UK unemployment rate rose to its highest level for more than three years in August as the coronavirus continues to harm the UK job market.
The unemployment rate surged to 4.5% in the three months leading up to August. The third-quarter figures were far higher than the 4.3% expected and a seizable leap from 4.1% in the previous quarter.
Adding extra concern was news from the Office for National Statistics (ONS). It showed redundancies, standing at 227,000 increased to their highest level since 2009. An estimated 1.5 million people were registered as unemployed between June and August.
Jonathan Athow, the ONS’s deputy national statistician for economic statistics told the BBC:
“Overall employment is down about half a million since the pandemic began and there are particular groups who seem to be most affected, young people in particular,”
“[Of those out of work] about 300,000 are aged 16-24, so about 60% of the fall in employment… that’s really disproportionate.”
GBP Declines
The poor unemployment figures sent the GBP in a steep decline in the forex markets. In Cable, the GBP/USD is currently down 0.97% on the day.
Elsewhere, the Euro is up 0.40% against the GBP, whilst the Australian Dollar is up 0.18%. Against the Canadian Dollar, the British Pound is down 0.71% and down 0.77% against the Japanese Yen.
Bank of England Compounds Economic Gloom
Heaping further misery upon the beleaguered GBP was comments from the Bank of England Governor. Andrew Bailey said he did not believe the British economy was in the midst of a sharp, ‘V’-shaped recovery.
Despite encouraging signs recently in UK consumer spending, Bailey told the House of Lords’ Economic Affairs Committee:
“A ‘V’ is really not the way I look at it in terms of what we face going ahead,”
“The recovery will take time.”
