GBP/INR has turned bearish in early trading on Thursday after rallying since Monday. At the time of writing, one British pound buys 97.700 Indian rupees, down 0.33% as of 7:25 AM UTC. The price might find support near 97.200 if it continues to decline today.
Earlier today, the Confederation of British Industry (CBI) said that Britain’s services companies cut jobs at the fastest pace on record in the three months to August. The UK’s job protection scheme amid the lockdown hasn’t stopped the increasing unemployment and it is about to end in October.
Professional services firms saw the steepest declines in more than a decade.
Services firms expected the job cuts to slow in the next three months, but the CBI stated that the government had to act right now. CBI economist Ben Jones stated:
“As we head into the autumn, the UK needs a bold plan to protect jobs as the job retention scheme draws to an end, to support the services sector.”
Finance minister Rishi Sunak said that his massive job retention scheme wouldn’t be extended beyond the end of October. Also, since the start of August, companies have had to pay a portion of its costs.
Previously, the Bank of England reported that unemployment might double to 7.5% by the end of this year. Many economists believe it may surge higher than that.
Earlier this week, CBI said that British retailers had cut the most jobs in over a decade and anticipated an increase in job losses. CBI economist Alpesh Paleja commented then:
“Trading conditions for the retail sector remain tough. […] Firms will be wary of deteriorating household incomes and the risk of further local lockdowns potentially hitting them in the pocket for a second time.”
India’s GDP Set to Drop 6.1%, Nomura Says
In India, the economic conditions are not helping the rupee. Yesterday, the country reported another record daily increase in the number of new coronavirus cases.
Nomura said that the country wouldn’t see its GDP growing in any quarter of the fiscal year 2021, predicting a 6.1% contraction for the year. The April-June quarter was likely the lowest point, as the economy dropped over 15%, Nomura said.