BoE's Saunders: Unemployment is set to rise further when furlough scheme ends

Eren Sengezer FXStreet

Bank of England (BoE) policymaker Michael Saunders said on Thursday that the unemployment rate in the UK is set to rise when the furlough scheme ends, as reported by Reuters.

Additional takeaways

"Jobless rate in the UK has risen markedly."

"More people report falls in savings than rises, the aggregate rise is concentrated at the top end of the income scale."

"The UK labour market has plenty of spare capacity."

"5 million jobs are estimated to be furloughed."

"My key focus for monetary policy is ensuring that activity is firm enough to use up the slack, lower unemployment."

"Elevated unemployment would be a sign that the UK has too much spare capacity, would push inflation below target."

"I see factors that could cause a slow, incomplete recovery."

"Risks include household caution over spending, fears of unemployment."

"Even when the UK economy regains pre-crisis size, it may still have spare capacity."

"I will put a high weight on labour market data."

Market reaction

The British pound preserves its strength following these remarks and the GBP/USD pair was last seen gaining 0.65% on the day at 1.3944.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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