The pound dipped under $1.29 earlier to $1.2864 (3.55pm) while the euro was down to $1.1714. Sterling is now more than -1% lower against the greenback over a seven day stretch.
Some of the dollar’s strength is premised on sprigs of hope – signs of balance sheet normalisation from Fed chair Janet Yellen (pictured) – from the July minutes, released tonight UK time. There should be more clarity on the next Fed rate rise also.
Sterling also came under pressure from a still (relatively) glum earnings read-out from the Office of National Statistics this morning. Though average weekly wages saw a 2.1% climb for the three months to June – significantly better than anticipated – that’s still a 0.5% gap behind UK inflation. People are still poorer.
Either way the new ONS numbers still look enough to keep the brakes on a Bank of England interest rate hike, rather than releasing them. The weaker pound predictably let things loose a bit for some of the export-dependent FTSE 100 commodity heavyweights such as Glencore, up 4.23% tonight and Anglo American, up 3.62%. The FTSE 100 itself closed at 7,433, up 0.67%.
- UK FTSE 100 7,433.03 +0.67%
- Dow 22,081.30 +0.36%
- S&P 500 2,473.17 +0.35%
- Nasdaq 6,357.01 +0.38%
- Nikkei 225 19,729.28 -0.12%
- DAX 12,293.07 +0.95%
- CAC 40 5,192.51 +1.01%
- Gold 1,277.80 -0.15%
- Oil WTI 47.52 -0.11%
UK unemployment at record low
The new ONS employment numbers now mean UK unemployment is at a 42-year-low, though bear in mind a lot has changed in that period – a surge in part-time work, zero hours contracts, more self-employment and a considerable expansion of the UK service sector. The figures need a sprinkling of caution.
But the figures still mean that 32.07m Britons were in work for the three months to June. "The employment picture remains strong, with a new record high employment rate and another fall in the unemployment rate,” said the ONS’ labour market statistician Matt Hughes. “Despite the strong jobs picture, however, real earnings continue to decline.”
The ONS claims the number of UK adults on zero hours contracts dipped 20,000 to 883,000, compared to this time last year; some positive news.
West Country investment for Amazon
The growth of Amazon continues. The retail titan is to launch a new warehouse close to Bristol creating 1,000 more jobs. Several other new warehouses will also open in Warrington and Doncaster, amongst others, later this year.
Last year Amazon UK services paid £7.4m in corporation tax compared to £15.8m in 2015. At a European level Amazon paid out just £15m in tax on revenues of £19.5bn. The gap between UK government talk of tax fairness and the reality remains wide, critics say. Amazon says it’s a low profit business – thin margins – and recently signalled it may make a third quarter loss (current quarter).
Breaking news: Ryanair says Air Berlin, which filed for bankruptcy earlier this week, is at risk of an asset stitch-up from Lufthansa and the Merkel government.