19 April 2023 - Inflation improvement is nothing to celebrate
The Government’s recent campaign to try to convince people that the economy is on the right path hit the buffers yesterday as the March employment report showed that claims for unemployment benefit rose by a little over 28k and the unemployment rate, despite being close to all-time lows, ticked up a little to stand at 3.8%. Another blow to the economy showed that insolvencies have risen to their highest level since monthly records were produced three years ago. 2,457 companies were liquidated last month, up from 1,784 in February. Companies are facing rising costs, especially energy, which in many cases has seen two or three-fold increases. Higher interest rates have also had a significant impact. While the Bank of England has been using monetary policy to slow demand, it is likely that rates have reached a point where they are restricting growth. This is expected to have an effect on the MPC’s decision on whether to increase rates at their meeting next month. With headline inflation in March to have possibly fallen to below 10% when the data is released later this morning, the time may have come to pause the hikes which have taken place at every meeting since December 2021. Beyond Currency Market Commentary: Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.