By Chris Towner, director of FX at HiFX
Despite the unemployment rate sticking at 7.8%, the recent health check of the UK economy continues to reflect a far broader and brighter outlook.
The claimant count fell by 29.2k, the ninth consecutive month of falls and the claimant count rate now stands at its lowest since February 2009. Overall this shows the labour market strengthening and bodes well for further positive momentum to the economy into the third quarter.
This is also reflected in Sterling which has strengthened from 1.4850 in July to trade at 1.5500 against the US Dollar and from levels below 1.1400 against the Euro last month to trade closer to 1.1700. Recently the employment data has become even more significant since the Bank of England’s decision to tie it in with their forward guidance on monetary policy.
However, perhaps more importantly it helps to create a more confident feel-good factor for the UK economy, which in itself can help catalyse further growth and distance itself from the dark days of 2008/2009.
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