Sterling rises after rise in UK jobs eases

Wednesday, November 17, 2021

The pound rose on Tuesday as traders bet that some of the Bank of England's concerns over the risks of a rate hike may ease after data showed UK employers hired more people in October after a job-saving short-term worker scheme expired.

Fears of a slowdown in the labour market after the aid program come to an end in September.

"Tuesday's robust employment data may now renew confidence in an imminent hike by the Bank of England," said Joe Tuckey, foreign exchange analyst with Argentex.

Against a strengthening dollar, the pound added 0.1% to $1.3426, wiping out some of its earlier gains in October, after data showed that US retail sales rose more strongly than planned.

Sterling rose 0.5% against the euro after data showed that UK workers on companies "payrolls increased by 160.000 to 29.3 million in October from the previous month, an increase of 0.8% on February 2020 when the pandemic struck, according to government data.

BoE governor Andrew Bailey also backed sterling, saying his vote to hold rates on hold this month was very close.

Meanwhile, there are worries there will be major trade disparities over Northern Ireland between the UK and the European Union, hitting the British economy which lags behind other wealthier nations.

The pound has slightly picked up this week, having fallen to its lowest level against the dollar in 11 months on Friday.