UK Unemployment Dwindles as Pound Loses Ground

Ibeth Rivero

The Office for National Statistics recently reported that the Unemployment Rate in the United Kingdom stood at 5 percent in January, less than expected as the analysts foresaw it to be at 5.2 percent and below the previous month's figure, which was at 5.1 percent.

The ONS also reported that Average Earnings Including Bonus went up by 4.8 percent, below the 4.9 percent the analysts expected and over the previous month's 4.7 percent. Average Earnings Excluding Bonus rose by 4.2 percent, lower than expected as the analysts foresaw it to be at 4.4 percent, and higher than the previous month's 4.1 percent.

The Chancellor of the Exchequer Rishi Sunak commented that the report showed that the coronavirus has caused one of the largest labor markets shocks the country has ever faced.

"We have taken decisive action with a £352 billion package of support," he continued, “The continued success of the vaccine rollout provides us with hope for the future, and through our Plan for Jobs, we will continue to support people throughout the months to come," he added.

So far, 27,630,970 individuals have gotten the first dose of the vaccine, while 2,228,772 are fully vaccinated. Since the beginning of the pandemic, the UK has reported 4,301,925 infections as well as 126,172 deaths, it's been a year since the government decided to impose restrictions for the first time to curb the spread of the virus. The current plan is lifting all restrictions by June 21, however, it's not clear whether the British people will be able to return to normal, especially now that cases are surging in other parts of Europe.

About this, the head of immunization at Public Health England Mary Ramsay commented that face covering and social distance may be required until other countries sort out their situation, which means they could be in place for years. She also warned against relaxing the restrictions too quickly.

"We have to look very carefully before any of these restrictions are lifted," she commented.

So far this week, the pound sterling has dropped by 0.64 percent against the US dollar, losing ground for the second consecutive week. Despite the losses, which are linked to the recent release of the job market data as well as the Federal Reserve chairman's most recent declarations, the pound sterling is expected to outperform both the dollar and the euro in the near future.

By 11:39 GMT, the pound dropped by 0.55 percent against the US dollar, falling to the 1.3786 level.

Ibeth Rivero

Ibeth contributes daily market commentary in both English and Spanish (both of which she speaks fluently) and she also manages the DailyForex mobile app to ensure that traders around the world are getting important market updates in real time.

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