ββ#ForexChief #LizTruss #Bailey #forexnews #boe #BritishJobMarket #pound #worldnews β
π¬π§ British job market stabilizes, but Liz Truss threatens to destroy the poundβ
π The statistics confirmed the signs of cooling of the labour market. Businesses have become more cautious about hiring and retaining the bulk of their workers during a record fall in base wages. However, inflation continues to eat into wages.
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Britain emerged from the pandemic with unemployment at its lowest level since 1974, largely due to a shortage of foreign workers. The current unemployment rate of 3.8% is at a minimum. Recall: BOE expects that the unemployment rate will begin to rise from mid-2023, and in three years it will increase to 6.3%.
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Wages before bonuses were 4.7% higher than a year ago, but CPI-adjusted regular income fell 4.1%. Large employers increase wages, but still do not keep up with inflation. BOE predicts that price growth will exceed 13% this year, more than six times the 2% target.
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Against this backdrop, Liz Truss, who is leading the race for prime minister, is calling for a review of the BOE's mandate and a new money supply target. Truss and her leadership allies have turned the central bank into a political punching bag, and blame Bailey and his colleagues for pushing inflation to a 40-year high.
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Markets are scared by the fact that, if Truss takes office, he could abandon his anti-inflation policy and recommend that politicians use tools that were discredited in the 1980s. Any attempts at confrontation with the BOE will immediately have a negative impact on the dynamics of the pound and government bonds. As a result of the protracted Brexit, there is still an outflow of assets from the UK, so the unreasonable policy of the new prime minister will be another step toward reducing investor confidence in British assets.
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Pound, in this case, you can only sympathize.
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Profits to yβall!