The GBP AUD exchange rate was slightly higher on Tuesday after the UK saw 60k new jobs added to the economy, according to the ONS. That was lower than analysts’ expectations and real wages were also seen lower for the first time in over a year as the cost-of-living crisis heats up in the country.
The GBP to AUD rate was trading at 1.8920 but is showing signs of resistance ahead of today’s inflation figures from the UK.
UK employment rises but real wages lower due to inflation
The UK economy saw 60k new jobs added although this was lower than the 125k that analysts had expected.
The Office for National Statistics also noted that vacancies had soared to 1.24 million between October and December, despite the spread of Omicron.
Another issue for the UK was that real wages were shown to have dropped for the first time in over a year as the cost-of-living crisis looms in the UK.
The figures were disappointing for Institute for Employment Studies director Tony Wilson.
“Despite record levels of vacancies and unprecedented demand, employment is unchanged on the figures reported last month while economic inactivity, the measure of those who have left the labour market entirely, appears to be rising,” Wilson said.
“As each month passes these issues appear to be getting worse, with the recovery clearly stalling on the eve of the Omicron outbreak. So, as we start the new year we need a new ‘Plan for Jobs’ that will raise participation and tackle the recruitment crisis,” he added.
Thomas Pugh, economist at RSM UK said the latest figures could boost rate hike chances.
Indeed, with pay growth at 4.2%, above its pre-pandemic level of about 3%, the MPC is likely to conclude that the labour market is strong enough to absorb higher interest rates.
Australia sees biggest day of virus-related fatalities
Australia saw its worst day of fatalities related to the virus, with seventy-seven deaths reported across the country- 36 of those were in NSW, 22 in Victoria and 16 in Queensland.
Meanwhile, the federal government said that more than 43,000 international students have arrived in Australia since it reopened its borders to select groups in December.
The immigration minister, Alex Hawke, who recently sent tennis star Novak Djokovic home, said more than 8,000 skilled workers had arrived in Australia, and 22,000 working holiday maker visas had been granted since November 2021. He added that the country had welcomed around 60,000 family members of Aussies since the November announcement.
The accounting firm KPMG had recently said that bumping net migration levels beyond 350,000 per year would help to reverse a population decline and stimulate demand.
The report said that meeting the 350k per year figure – equivalent to adding a new Brisbane every seven years – would boost GDP by 4.4 per cent.
The Pound versus the Australian dollar now waits for UK inflation data released today with a 0.1% dip expected in the year-on-year figure.