Monday morning saw a sharp dip for sterling against most major currencies. However, it was largely recovered against the euro by the end of the day, and indeed the losses reversed against the US dollar and the renminbi. This morning sterling has surged upwards following unemployment and earnings data, reaching its highest level against USD since April 2022.
Governor of the Bank of England (BoE) Andrew Bailey made a speech at the Mansion House yesterday, in which he said that inflation would fall “markedly” by the end of the year, but that interest rates would continue to rise. He also had a warning on wages, saying: “Both price and wage increases at current rates are not consistent with the inflation target.”
He will not be thrilled at the data just released by the Office for National Statistics, saying that wages (excluding bonuses) rose by 7.3% in the past year, as per the previous month and some way ahead of expectations. Some of that money is finding its way to the high street, with retail sales up by 4.2% year-on-year. Unemployment rose to 4%, with 77,000 more unemployed people last month taking the total to 1.37 million.
In the business news, there is mounting misery for travellers this summer. London Underground drivers are going on strike later in July, as are other railway workers. And easyJet has cancelled 1,700 flights, blaming “unprecedented air traffic control delays”. The airline points out that it normally operates 1,800 flights per day.
For those staying at home, the trade body for UK Hospitality said that staffing was at crisis levels, with nearly 50% more vacancies than pre-pandemic.
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