GBP/INR is advancing in early trading on Wednesday, after three consecutive bearish sessions during which the pair lost over 1.1%. Still, the larger picture favors the sterling. Currently, one British pound buys 97.573 Indian rupees, up 0.22% as of 6:10 AM UTC.
Yesterday, the price broke below 98.000 after the UK Office for National Statistics (ONS) released somewhat disappointing employment data. The number of workers in Britain saw the largest decline since 2009. The ONS said that there were 220,000 fewer people with a job in the three months through June. There are more signs that the pandemic will have a more severe impact on the labor market than initially expected, especially when the government is closing its massive job-protection scheme. Still, the unemployment rate for June stayed unchanged at 3.9%, while analysts expected an increase to 4.2%.
Gerwyn Davies of Chartered Institute of Personnel Development commented:
“A real concern is that this is just the first wave of bad news for the jobs market. The fact that reduced hiring rather than increased firing of permanent staff is the main cause of the jobs slowdown to date bodes ill for the coming months if more employers turn to redundancies as a last resort.”
British finance minister Rishi Sunak said that the government’s support schemes were doing their job, but that doesn’t mean it can prevent all job losses.
Average earnings fell by the most in over a decade in the second quarter, down 1.2%. Without bonuses, pay fell for the first time on record.
UK Economy Tumbles Record 20.4% in Q2
Nevertheless, the pound turned bullish on Wednesday morning, after the ONS released data on the economic performance in the second quarter. Britain’s gross domestic product (GDP) saw a record decline of 20.4% in the three months through June, but that was still slightly better than predicted figures. The data suggested that the UK entered a recession as its economy contracted for the second quarter in a row.
In June alone, the economy was recovering as the government started to gradually lift restrictive measures. The economy grew by 8.7% compared to May, while analysts expected an 8% increase.
