By Matthew Vassallo
GBP has held its position against the EUR over the first two trading days of the week, with investors’ continued support somewhat buoyed by confirmation than the UK job market is now back to pre-pandemic levels, albeit with real wages lower.
Whilst this figure is likely to be highlighted as a self-proclaimed ‘win’ for the Prime Minister when he addresses members of the House of Commons later today, the real positive of this is somewhat muddied by the fact the gains in employment were markedly less than expected, although perhaps the real concerns with inflation levels sitting at over a a decade high and still going up, is that real wages across both the public & private sectors remains poignantly lower. This is also likely to be the key reason that GBP has failed to make any significant inroads back towards its earlier month high against the EUR.
With the crisis in Ukraine rightly continuing to dominate headlines, UK Prime Minister Boris Johnson seemed to, up until yesterday at least, have weathered the now infamous ‘partygate’ storm. This ongoing, uncomfortable issue was brought to the forefront once again when the police announced a raft of fines for an illegal gathering that took place in number 10 on the Prime Minister’s b’day in June. Both Boris Johnson & Chancellor Rishi Sunak were implicated and received fines. Whilst the fines may seem poultry to members of the public who have grown to feel nothing but utter disdain towards the current establishment, this number may yet be multiplied as the police have yet to release their reports and prospective penalties for the Christmas period.
Looking at the other major currency pairs and GBP/USD rates have fallen by over a cent since Monday’s opening trading bell, with the Dollar finding seemingly relentless support, as investors continue to buy USD positions as protection for their financial assets. This is not an unexpected result of the stagnation in the global markets and a growing concern that the current slowdown in the property market could soon be amplified into a full blown housing crisis, with the current bubble predicted to burst sooner or later.