Since the outbreak of the pandemic, the pound has risen to its highest level against the euro.
Despite an encouraging drop in European unemployment this morning, sterling hit €1.1995, its highest level since February 2020.
Even after the impact to hospitality in the run-up to Christmas, the pound has recovered in the previous month, boosted by hopes that omicron will not ruin the economic recovery.
Victoria Scholar, interactive investor explained further with the help of charts on her Twitter account the following:
The unemployment rate in the Eurozone fell to 7.2 percent in November from 7.3 percent in October.
The EURGBP exchange rate continues to plummet….
Since the start of the pandemic in February 2020, sterling has reached its highest level against the euro.
According to Bert Colijn, senior eurozone economist at ING, after decreasing in November, eurozone unemployment has nearly bridged the gap with its best pre-pandemic figure. Furlough scheme support and swift demand recovery are responsible for this great success. The low rate of unemployment paves the way for rising medium-term inflation to continue.
Given the strong demand for workers, Colijn is likewise optimistic that unemployment would not rise until job protection policies expire.
“Furlough schemes are still sustaining – part of – the employment market, therefore there is some anxiety as to what will happen when they are no longer available”. said Colijn
He added that they were not too concerned about that now since labour demand appears to be so robust, and take-up of the schemes had already dropped considerably during the pandemic.
According to Eurostat, the unemployment rate in the euro area decreased to 7.2% in November, down from 7.3% in October and nearer to pre-pandemic levels.
It was 8.1 percent a year ago, before vaccine rollouts aided the European economy’s reopening.
The number of unemployed people in the eurozone declined
- by 222,000 in November,
- by 247 000 in the wider European Union,
- and by 222 000 in the eurozone.
However, there are still 11.8 million unemployed people in the eurozone and nearly 14 million throughout the EU.
The upsurge in the spread of Covid variant Omicron and the imposition of lockdown measures in a number of European countries in the later half of last month may have hindered job growth.
