GBP/INR is declining in early trading on Tuesday, after almost touching 96.000 for the first time since September 8. At the time of writing, one British pound buys 95.613 Indian rupees, down 0.24% as of 7:10 AM UTC. The pair managed to break above key resistance at 95.500 but failed to go further and break above the psychological level at 96.000.
The pound retreated as the UK Office for National Statistics (ONS) reported that the unemployment rate had increased to 4.5% in the three months to August from 4.1% in the three months to July, while analysts expected the indicator to stop at 4.3%. The jobless rate is at the highest level in over three years as the government’s job protection scheme ends. Nevertheless, finance minister Rishi Sunak introduced another program, though it’s less generous.
The ONS said that the number of those in employment declined by 153,000, while analyst expected a decline by 30,000. Also, the ONS revised up its estimate for job losses in previous months.
Statistician Jonathan Athow said:
“Since the start of the pandemic there has been a sharp increase in those out of work and job hunting but more people telling us they are not actively looking for work. There has also been a stark rise in the number of people who have recently been made redundant.”
Pound Squeezed by Multiple Factors
The pound is also under pressure amid the new restrictions in England introduced by Prime Minister Boris Johnson to address the second wave of the pandemic, which has hit the UK and Europe. Meanwhile, the Bank of England asked banks whether they would be ready for zero or negatives interest rates.
The Brexit deal deadline is expiring on Thursday, but no progress has been announced. Still, a spokesman for Johnson said yesterday that Britain would work hard to secure a deal by the end of this week.
In India, retail inflation surged to the highest in eight months in September, putting pressure on the central bank, which cannot force further easing. Despite increasing prices, retail spending surged 12% in September from August.