020 7898 0500The UK’s unemployment rate somewhat surprised investors yesterday morning, coming in at a better than expected 4% from an expectation of 4.2%. This was the lowest recorded level since 1975. However, any confidence in this figure was somewhat subdued by reports of a slowdown in the pace of wage growth. June’s wage growth reading including bonuses slowed from 2.5% to 2.4%, going against expectations for no change or even a rise.
There appears to be general doom and gloom around the pound after increasing risks of a ‘no deal’ were recently highlighted by comments from Trade Secretary Liam Fox and Bank of England Governor Mark Carney. Prime Minister May is reportedly ramping up preparations for a ‘no deal’ scenario over the coming weeks. However, Lloyds bank have argued that the markets might be a little too pessimistic on sterling’s prospects going forward. Although there is only limited time for negotiations before the March 2019 deadline, and the situation remains fluid as political discussions intensify, Lloyds Bank are confident the UK government will conclude a withdrawal agreement by March 2019.
The above only highlights the heightened uncertainty around the Brexit deal and the polarising views of various banks and specialists. The only thing we can safely assume is that there will be significant moves on sterling in the coming months as the situation becomes clearer.
