London Markets: Pound rises as latest U.K. jobs data seals case for Bank of England rate hike
Economists said a December rate-hike from the Bank of England was virtually assured after data showing the end of furlough didn’t lead to a deterioration in the jobs market.
The Office for National Statistics reported that payrolled employees rose by 160,000 in October, after the furlough program ended in September. The statistics agency said a separate business survey suggests that the lack of redundancies wasn’t just a function of companies working through the layoff process. “Responses to our business survey suggest that the numbers made redundant was likely to be a small share of those still on furlough at the end of September 2021,” the agency said.
Markets had already priced in a December interest-rate hike, though in fairness, they had priced in a November increase that never came. And there’s still one more jobs report before the next Bank of England meeting.
“While some small uptick in unemployment is possible as a consequence of furlough payments ending for untenable jobs, strong employment gains, persistent wage pressure and a further rise in vacancies will likely support the case for an immediate 15bps hike in the bank rate,” said Kallum Pickering, senior economist at Berenberg.
The yield on the 2-year gilt
edged up to 0.57% from 0.56%. The pound
rose to $1.3466 from $1.3415, though still well below the levels before the last Bank of England meeting.
rallied 4% as the mobile operator raised its fiscal year adjusted profit and cash flow guidance.