- Strong employment figures for the month of July
- Wage growth slows, could this impact consumer spending?
- Small increase in jobless claims but otherwise healthy job sector
Unemployment remains steady despite Brexit predictions
The latest round of unemployment data highlight that the UK continues to shrug off the Brexit hangover. It was widely expected during and after the UK Referendum that a leave vote would impact business confidence, this is yet to be seen 3 months on.
However, wage growth has taken a dive according to the 3-monthly release from the national statistics, which could spell trouble for the UK with the fall in the Pound’s value and thus, a rise in product prices. If prices continue to rise in the UK but wages don’t follow suit, this could impact consumer spending.
Jobless claims have increased but only marginally, as a result of this mornings releases we’ve seen little movements with GBPEUR trading at similar levels seen yesterday – 1.175/6.
Will unemployment remain low?
Whilst the latest release is positive the likely impact of Brexit will spill into the economy in the months ahead. Brexit will change the way the UK deals with the EU going forward, with discussions already taking form regarding visa’s and changes to free movement of people.
London’s status as the financial hub of the World is also in jeopardy, the media have highlighted a number of financial institutes looking to move into Europe to maintain current business conditions. And given that a large majority of transactions are routed to New York, it’s vitally important that the UK maintains as much of its current conditions with the EU especially for those that work in the financial sector.
There continues to be troubling times for Sterling ahead, and if you are buying foreign currency in the short term, I would consider doing so in the next month or two. I do not envisage these positive trends to continue for much longer.