by Jack Smith
The
pound has surged to 1.3577 versus the euro today, a new 7-year high,
its strongest since December 21st 2008. Sterling has climbed, chiefly
because UK wages rose more than forecast in January, while British
unemployment unexpectedly fell to its least since 2008, at just 5.7%.
Sterling
has climbed, first because UK wages including bonuses rose +2.1% last
month, according to the Office for National Statistics, well ahead of
the +1.7% forecast. This lifted the pound because, given that UK
inflation fell to an all-time low of just 0.3% last month, British
consumers’ spending power will now increase, fuelling Britain’s
economic comeback.
Moreover,
the pound also jumped, because UK unemployment surprisingly fell to a
new 6-year low of just 5.7% in the 3-months to December, according to
the ONS, exceeding forecasts it would remain stable at 5.8%. This
boosted sterling, because there were -97,000 fewer jobless people in
the UK between October, bringing the jobless total down to just
1.86m, and so brightening the UK’s economic outlook.
