The GBPEUR exchange rate is slightly lower on Tuesday as traders pause from recent gains in the British pound. Traders found the highly anticipated roadmap from Boris Johnson to be underwhelming, but another round of dismal jobs data from the UK failed to bring sellers.
GBP to EUR is trading at 1.1555 with the jobs numbers out after the pound saw another week of gains.
Unemployment Rate Rises Again to 5.1%
The UK unemployment rate has risen again to 5.1% in the three months to December, according to the latest release from the ONS.
The Office for National Statistics figures have highlighted an unemployment rate that is 1.3% higher than a year ago. Analysts had expected a loss of -30k jobs in the economy, but the actual figure was worse at -114k. The numbers will ensure that Rishi Sunak extends the furlough scheme in his budget on 3rd March and the Prime Minister hinted at this yesterday. The furlough scheme is masking the true state of the country’s unemployment situation, whilst it also keeps workers placated. Recent surveys and reports have threatened further job losses to come in the hospitality sector and the “cautious” reopening will ensure that those losses present themselves in the weeks ahead.
Further data for the near-term GBP to EUR outlook will be today’s inflation figures from the Eurozone. The market expects a reading of 1.4% after 0.2% in the previous month as prices start picking up despite the lockdowns being in place.
Holiday Bookings Surge After Johnson Strategy Released
Boris Johnson addressed the nation on his strategy to open the economy, but this was cautious as he and Matt Hancock had hinted in the last few days.
Brits have had enough of the gloom at home, however, and holiday bookings have soared in the hours following his speech. Bookings surged following the announcement of the strategy, according to airlines and travel firms.
The plans will see hotels allowed to open and foreign travel permitted from May 17th at the earliest. Travel company Tui have seen their best day of bookings in over a month, with interest in Spain, Greece, and Turkey. Thomas Cook reported to the BBC that bookings were “flooding in” and the rush to get away will dent the Bank of England’s hopes that household savings will be spent at home.
The Prime Minister’s roadmap was underwhelming for traders and calls into question the country’s ability to see a strong second quarter as the BoE predicted. Johnson has said non-essential businesses would be open on April 12th at the earliest, with the long-awaited “normal” expected in June.
The GBP to EUR exchange rate has support at the 1.1500 level for the week ahead.
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