According to the latest data from the Office for National Statistics (ONS), the UK's unemployment rate increased by 0.2% in the three months ending in August. During the same period, the employment rate decreased by 0.3 percentage points to 75.7%, equivalent to a loss of 82,000 jobs, following a 113,000 job reduction in the previous quarter. While the unemployment data appears relatively stable for now, the recent rise in interest rates has prompted some companies to be more cautious about hiring and to cut jobs. The positive aspect of this data is that it might be sufficient to deter the Bank of England (BOE) from implementing another interest rate hike in their upcoming meeting.
According to a new report from the Federal Reserve, there has been little change in economic activity in the United States over the past six weeks. The report notes a continued easing of labor market tightness and a sustained increase in prices, albeit at a more moderate pace. The Fed's "Beige Book" summarizes information collected from surveys, interviews, and observations in the central bank's 12 districts through October 6. The overall outlook for the economy in the near term is generally described as stable or showing slightly weaker growth. Companies anticipate price increases in the coming quarters, although at a slower rate than in previous quarters.
On October 23, officials from the United States and China held a two-hour virtual meeting to discuss domestic and global macroeconomic developments, as confirmed by the US Treasury Department. This meeting was characterized as "productive and substantive." Relations between the two largest global economies have been strained in recent years due to various issues, including Taiwan, the origins of the COVID-19 pandemic, allegations of espionage, human rights concerns, and trade tariffs. Senior officials from both sides have been engaging in meetings to lay the groundwork for an anticipated meeting between US President Joe Biden and Chinese leader Xi Jinping in San Francisco in November.
Towards the end of last week, The pound was at its weakest against the euro in five months after a slump in retail sales raised concerns about the British economy. The pound also slumped against the dollar as it raised the prospect that the Bank of England will not raise interest rates again in the face of a weakening economy. As things have settled both the Euro and pound have gained back some risk associated ground which was lost against the dollar. GBPUSD is trading up from 1.2105 to 1.2275, whilst EURUSD is at 1.0690. GBPEUR trades at 1.1490.
