The UK Claimant Count Change figure for April will test the employment market’s resilience – and the government’s furlough scheme. A figure that is better than the worst of the previous crisis would be positive for the pound, while other outcomes could be worse, FXStreet’s analyst Yohay Elam reports.
Key quotes
“Economists expect applications to have risen by 150,000, topping the financial crisis high of 138,600 recorded in February 2009.”
“Any jump in claims between roughly 140,000 and 200,000 would be worse than the Great Financial Crisis peak but still at manageable levels. In that case, the cable will likely shake but remain within range.”
“If headlines only shout ‘worst since the financial crisis’ – but not ‘worse than’ – it would be considered a beat, showing that the UK has its labor market under control and would boost the pound.”
“If the UK labor market takes a bigger hit, with over 200,000 claims, it would already deal a blow to sterling, and show that the furlough scheme has its limits.”
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