Sterling got off to a good start yesterday as traders reacted to some better-than-expected labour market data. Although the headline Unemployment Rate remained at 7.7%, it was reported that 155,000 new jobs were created in the three months leading up to August and that the number of Jobless Claims shrunk by -41,700 – the most since 1997 – during September. The encouraging report shows that employment prospects are picking up, but it also proves that the projected decline in total Unemployment to the Bank of England's 7.0% threshold is likely to be a long slog.
Disappointingly, the labour market report also featured a lower-than-anticipated Average Weekly Earnings figure of 0.7%, severely lower than the CPI inflation rate of 2.7%, which means that real wages have now fallen to their lowest level since records began in 2001.
