London Markets: Pound rises as latest U.K. jobs data seals case for Bank of England rate hike
Economists said a December rate-hike from the Bank of England was virtually assured after data showing the end of furlough didn’t lead to a deterioration in the jobs market.
The Office for National Statistics reported that payrolled employees rose by 160,000 in October, after the furlough program ended in September. The statistics agency said a separate business survey suggests that the lack of redundancies wasn’t just a function of companies working through the layoff process. “Responses to our business survey suggest that the numbers made redundant was likely to be a small share of those still on furlough at the end of September 2021,” the agency said.
Markets had already priced in a December interest-rate hike, though in fairness, they had priced in a November increase that never came. And there’s still one more jobs report before the next Bank of England meeting.
“While some small uptick in unemployment is possible as a consequence of furlough payments ending for untenable jobs, strong employment gains, persistent wage pressure and a further rise in vacancies will likely support the case for an immediate 15bps hike in the bank rate,” said Kallum Pickering, senior economist at Berenberg.
The yield on the 2-year gilt
edged up to 0.57% from 0.56%. The pound
rose to $1.3466 from $1.3415, though still well below the levels before the last Bank of England meeting.
The FTSE 100
was steady as other European markets
edged up to record highs. U.S. stock futures
were a touch lower ahead of retail sales data.
rallied 4% as the mobile operator raised its fiscal year adjusted profit and cash flow guidance.
added 2% as the tobacco company edged past earnings estimates and said it’s well placed to manage inflation.