Pound to euro exchange rate has fallen again after wage growth slows
The ONS figures released earlier this week have prevented the pound from climbing against the euro, coming in at €1.118, falling from €1.120.
It comes as the inflation figures reach the highest since April 2012 at 3 per cent, a five year high.
Wage growth is currently struggling to keep up with inflation as a gap grows between them, meaning households will struggle.
Despite the unemployment rate holding at a 42 year low of 4.3 per cent, this hasn’t helped the gap growing between inflation and wages.
The wage growth slowing down has affected most households
The Bank of England could now increase the interest rate from 0.25 to 0.50 in November following on from the new results.
Many of those affected are younger workers, with 16-24-year-old employment falling from 13.7 per cent to 11.9 per cent.
Whilst the employment rate has been climbing slowly since the financial crisis in 2011, the wage growth slowing down has affected most households.
To get back to the same levels before the financial crash six years ago, Britons would need as much as £15 extra every week in their wage to make the difference.
The pound has fallen again the euro after inflation has risen to it’s highest since 2012
TorFX currency analyst Laura Parsons commented: “The GBP/EUR exchange rate slipped below €1.120 on Wednesday as the latest UK employment figures revealed and intensification of the wage squeeze being applied to British workers.
“Average earnings increased by slightly more than forecast at 2.2 per cent, but with inflation currently running at a five-year high of 3 per cent, there are concerns that consumer spending will suffer in the months ahead.
“The situation may also cause the Bank of England (BoE) to think twice about increasing interest rates in November.
“If today’s UK retail figures confirm that spending dipped in September the GBP/EUR exchange rate could give up further ground before the weekend.”
The pound falls against the euro, as wage growth struggles to keep up with inflation rates
The uncertainty surrounding Brexit has also affected the struggling pound.
Theresa May headed to Brussels earlier this week in a bid to discuss the new relationship between Britain and the EU.
Many feared that a “no-deal” could occur, putting the UK at risk of falling behind and coming out of Brexit worse.
Amber Rudd since spoke out against Brexit Sectary David David after he gave the option of a no-deal, as she stated it was “unthinkable.”