12/07/2017 – This Morning’s Exchange Rates

This mornings exchange rates are listed at the bottom of this article.

British workers saw their pay and bonus growth fall further behind inflation in the three months to end-May, data showed today, but the jobless rate hit a 42-year low.

The duel reports will complicate the debate among Bank of England officials over the need for higher interest rates.

Sterling bounced against the dollar after official figures showed the unemployment rate in the period between March and May fell to its lowest since 1975 at 4.5 percent, below the average forecast of 4.6 percent in a poll of economists.

But lackluster wage growth showed the challenge facing Prime Minister Theresa May and her minority government, with growing signs that households are feeling the strain of rising prices since last year’s Brexit vote.

The Office for National Statistics said pay including bonuses, adjusted for inflation, fell 0.7 percent in the three months to May compared with a year earlier — the sharpest drop since mid-2014.

In nominal terms, total earnings rose by an annual 1.8 percent, the weakest increase since the three months to November 2014 and compared with 2.1 percent in the period to April. This was in line with the Reuters poll consensus.

The Bank of England is watching wage growth closely as it gauges whether the increase in inflation is creating longer-lasting pressure on prices. It expects wages to rise by 2 percent this year before picking up in 2018 and 2019.

The number of people in work rose by 175,000 in the three months to May, taking the employment rate to a record high of 74.9 percent, the ONS said.

The ONS said the number of unemployment benefit claimants rose by 6,000 to 829,000 in June, a slightly smaller increase than in May.

Economists taking part in a poll had expected the number of benefit claimants – which is considered to be a potential early warning sign of an economic downturn – to rise by 10,000.

GBP/EUR 1.1218

GBP/USD 1.2844 

GBP/AED 4.7032

GBP/AUD 1.6791 

GBP/CAD 1.6605 

GBP/CHF 1.2367

GBP/NZD 1.7754  

EUR/USD 1.1427  

GBP/ZAR 17.136

Rates above are for indication, not live. Call for live prices.

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