POUND sterling has taken a tumble despite the UK’s unemployment rate dipping to historic lows.

Pound to euro exchange rate – sterling dives despite unemployment reaching historic lows

GBP continues to struggle against the single currency even with the release of encouraging data out of the UK this week.

The pound is buying €1.16 after sliding from €1.17 yesterday.

Yesterday the unemployment rate was reported at the lowest level seen in more than four decades.

The jobless total fell by 53,000 to 1.54 million in the quarter to March, a rate of 4.6 per cent, the lowest since summer 1975 when Labour’s Harold Wilson was in Number 10.

The UK’s latest jobs data might have shown that the nation’s unemployment rate dipped to a historic low but the pound remained down in the dumps

Laura Parsons

Employment has increased by 122,000 to almost 32 million, the highest since records began in 1971, reported the Office for National Statistics (ONS).

But the encouraging jobs data failed to boost the exchange rate.

Laura Parsons, currency analyst at TorFX, said: “The UK’s latest jobs data might have shown that the nation’s unemployment rate dipped to a historic low but the pound remained down in the dumps on Wednesday.

“Weak UK wage growth heightened concerns that consumer spending will be garrotted in the months ahead as inflation continues rising.

“Today’s UK retail sales report could send the pound to fresh multi-week lows against the euro if it reveals a slump in spending, but a better-than-forecast result might just give the pound the oomph it needs to stage a recovery before the weekend.”

UK inflation data released earlier this week also failed to benefit the pound.

The Consumer Price Index (CPI) measure of inflation reached 2.7 per cent in April, the highest rate since September 2013.

This inflation jump would typically benefit the pound as investors price in a possible Bank of England (BoE) interest rate hike to offset the cost of living.

But instead the exchange rate continued to slide in favour of the EU.

Despite a disappointing performance against the euro, sterling has strengthened against the falling US dollar as it reacts to fresh turmoil surrounding Donald Trump’s presidency.

The US dollar dropped sharply against both the pound and euro, after a report claimed the President asked former FBI director James Comey to drop an investigation into Michael Flynn and his connections to Russia.

Sterling climbed to US$1.30 before slipping slightly overnight to US$1.29.

Posted on; Express.co.uk>>

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