UK unemployment hurts sterling

This morning’s UK unemployment figures have shown the largest jump in 2 years, with 37,100 new claimants.

This is the largest increase since May 2009 and has pushed the UK unemployment rate up to 7.9%, above analysts’ forecasts and a disappointing reading for the UK economy and therefore the Pound. Sterling has lost nearly a cent against the Euro and US Dollar, along with similar drops against other currencies, in trading this morning.

In further bad news, the Bank of England minutes revealed that all 9 committee members voted to keep interest rates on hold this month, rather than the 7-2 split which has been the case in most recent months. An interest rate rise would be welcome news for sterling, but the prospect of any rises this year now looks lost.

Tomorrow we have retail sales figures out at 9.30am but unless there is some unexpected good news, sterling could be in for further losses in the coming days and weeks. If you have a requirement to send funds abroad, it could be worth getting a rate secured sooner rather than later to protect yourself against any further adverse movements; if you would like to discuss your options please contact us at Currency Index on 0800 043 2623 or 01923 725725.