Sending money overseas has never been this easy. With banks striving to keep up-to-date as the financial markets change rapidly, currency brokers and money transfer companies dominate the industry. If you want to send money overseas, then look no further than expert currency transfer and foreign exchange broker Universal Partners FX.  UPFX has streamlined international payments and has made it so much easier for everyone to send money overseas. Currency brokers, for example, do not charge any fees when transferring your funds and they also provide a much better exchange rate than your bank.  So how does money transfer work?

How to start

First, you will need to open an account with an international money transfer firm and once you do so they will get in touch to discuss the transfer, walk you through the process, explain the exchange rates and any other necessary information you’ll need to approve before proceeding. You will then be able to book the transaction, providing details of the recipient’s account and pay the agreed amount, via an electronic transfer from your UK bank account.

When to expect the money to arrive?

The process is simple and straightforward and should not take longer than two working days. Some transfers depending on the currency and exchange rates can be executed instantly within seconds. It is common that major currency pairs or strong currencies will be transferred faster than weaker ones.  

Transferring money overseas

One of the safest, most secure and fastest ways to transfer your money internationally is by using an international money transfer firm. UPFX has consistently executed trades by offering competitive rates to all clients with low fees. Online money transfers are the most popular method for transferring funds overseas.

Exchange Rate: What is it?

An exchange rate tells you how much one currency is worth in relation to another currency. The general rule is that the higher the exchange rate, the more money you will receive when you trade. The exchange rate is not something stable and changes all the time depending on market news, the political situation in that country’s currency and other events that could cause volatility in the foreign exchange market. The foreign exchange market or, simply, forex, is considered the most liquid financial market and is very volatile. Because trillions of dollars are being exchanged, it is easy to buy and sell currencies. In 2019, the daily volume of the forex market reached $6.6 trillion! So, this is why the market is big, competitive and why many people decide to trade as a hobby with the potential to make a profit. While it provides plenty of trading opportunities, the forex market is also risky, that is why registering with a leading money transfer firm such as UPFX will save you time, money and lots of stress. If your business for example has regular transfers or requires a more nuanced currency strategy and risk management, then UPFX will provide you with a plan and a solution to suit your specific requirements.

Trading internationally? Save money with Universal Partners FX

If you are making international money transfers, you will need a cost-effective and secure way to do so. Universal Partners FX is the right partner for your foreign exchange. With UPFX, you can open a multi-currency account, send and receive money worldwide with low and transparent fees. You can also manage your money and send international payments 24/7 through UPFX’s easy-to-use online platform powered by Currency Cloud.

If you are an exporter or plan to start your international business, get in touch now with Universal Partners FX to find out how much you can save in your international money transfers.

 

 

The pound fell and remains vulnerable to global growth concerns and the ongoing fuel crisis in the UK as analysts fear of a difficult winter ahead. The fuel crisis has sparked concerns that growth will slow down, while rising inflation will aggravate problems. The panic buying of petrol was the result of fears regarding supply chain issues as the UK is struggling to recover from the Coronavirus pandemic.  

150 soldiers prepared to drive tankers

UK business secretary Kwasi Kwarteng has said that military tanker drivers are ready to help with the fuel crisis and transport petrol to stations, as 150 soldiers will be driving tankers within a few days. Despite calls to motorists to stop panic-buying at petrol stations, queues have continued. Kwarteng admitted that the last few days have been difficult, with large queues, but the situation is stabilising and that with soldiers driving the tanker fleet and getting petrol into the forecourts, things will return back to normal soon. In regard to issues in the run-up to Christmas, where people are busier, Kwarteng explained that it was difficult to make any predictions, but, nonetheless, he reiterated that the “situation is stabilising.”

The fuel crisis has generated more concerns about who will have priority access and many unions have requested that doctors, nurses and other essential workers to be given priority access to fuel. The Prime Minister has resisted this. The worst shortages have been experienced in London and English cities with fights and, in one incident in south London, a driver pulling a knife.

The supply chain issue and the shortage of lorry drivers is linked to Brexit and the government has said that it will deal with the driver shortage by providing temporary visas to 5,000 foreign drivers.

Bank of England to raise interest rates

The Bank of England will be forced to raise interest rates to fight inflation. Markets are concerned about the Bank having to tighten its policy against a weak background, with analysts describing it as a “stagflation story.”

The UK is especially vulnerable as it appears to be the hardest hit by the energy and supply chain crisis. The energy crisis is affecting economic activity, while the rising gas prices are a real issue for the currency. With the ongoing energy crisis, the pound will remain under pressure, and once it clears it will be able to stabilise. The gas price surge is also a global phenomenon as Asian countries are also competing for the same supplies. Growing fears of an energy shortage in China have led to Sinopec, an LNG importer, to outbid European competitors.

Traders and analysts are now focusing on the fuel crisis as they are worried about how the UK economy will fare and whether the current crisis is temporary or will last longer.

If you are a business transferring funds overseas, contacting a currency specialist could save you time and money. Get in touch with Universal Partners FX and their dedicated team to discuss the latest market movements ahead of your currency exchange. If you are transferring funds to pay your employees abroad, get in touch with Universal Partners FX to find out how much you can save in your international money transfers. Universal Partners FX can provide invaluable help on efficient risk management and tailored solutions to your business’ transfer needs.

 

The pound was stronger yesterday but dropped slightly today following the fuel crisis. The government has the army on standby to help ease fuel supply problems following days of long queues, panic-buying and pump closures. Analysts warn that this will only offer temporary relief, and that the UK needs to do more to more find a more long-term and viable solution to its current HGV driver shortage.

Analysts have noted their concerns about the impact of fuel shortages on everyday life, soaring energy prices and labour shortages which could eventually dent the UK’s economic recovery.

Petrol supply

Fears of driver shortage hitting fuel supply has led to a surge in demand with up to 150 military tanker drivers ready to deliver to petrol stations which have run dry because of panic buying. There is no shortage of fuel, but simply a shortage of fuel in petrol stations, due to a lack of lorry drivers. While this was expected to have minimal effects, the problem has been exacerbated due to the behaviour of motorists who have rushed to stations panic-buying fuel. The transport secretary Grant Shapps said there were "tentative signs" of stabilisation in petrol stations and the Petrol Retailers Association said that the number of motorists at petrol stations was beginning to calm. As Shapps noted, "Once we all return to our normal buying habits... the quicker we get back to normality." The UK is short of more than 100,000 lorry drivers which has affected many industries, especially food suppliers and supermarkets.

In a joint statement, fuel companies, including BP and Shell, have reassured the public that supplies have not been affected and that demand will return to normal levels.

Higher Inflation Could Help the Pound Rise Higher

In the meantime, the pound is expected to rise as inflation pushes higher and the BoE is forced to raise interest rates. Higher inflation is the result of a combination of factors, including supply shortages and shortages of HGV drivers. While the central bank has stated that inflation is only temporary, there are concerns that it will remain high for a longer period of time.

Bank of England Governor Andrew Bailey has expressed his concerns about the current issues with supplies that have pushed inflation higher, and he noted that the Bank is ready to act if this becomes a long-term issue. He said that higher inflation can be dealt with higher interest rates and that a rate rise before the end of this year is not impossible.

The rising energy prices that have pushed inflation higher are a major concern in the UK, and the question is whether more persistent inflation than expected will prove to be the case and how the Bank of England will change its monetary policy to respond to this. The Bank of England last week warned that their forecast for high inflation at 4.0% will be exceeded. In August, the Bank raised their peak forecast from 3.0% to 4.0%.

If you are a business transferring funds overseas, contacting a currency specialist could save you time and money. Get in touch with Universal Partners FX and their dedicated team to discuss the latest market movements ahead of your currency exchange. If you are transferring funds to pay your employees abroad, get in touch with Universal Partners FX to find out how much you can save in your international money transfers. Universal Partners FX can provide invaluable help on efficient risk management and tailored solutions to your business’ transfer needs.

 

The UK’s supply problems could push the pound lower despite that the market has priced in more interest rate hikes by the Bank of England for next year. The government has offered temporary visas to fuel tanker and food lorry drivers, and to poultry workers. Britain's ongoing supply chain crisis could threaten the UK’s economic recovery, and combined with higher inflation, it could post serious risks to the pound.

Visas to lorry drivers

With Christmas just around the corner, the government is seeking to avoid disruption and will provide up to 10,500 lorry drivers and poultry workers with temporary UK visas. 5,500 poultry workers and another 5,000 fuel tanker and food lorry drivers will be allowed to work in the UK for three months, until Christmas Eve. The Road Haulage Association said the government’s announcement "barely scratches the surface", and that just offering temporary visa for a limited period "will not be enough for companies or the drivers themselves to be attractive." Director of the HGV Recruitment Centre, Marc Fels, said visas for lorry drivers were "too little" and "too late." The move is, however, a huge step forward in providing a temporary solution to supply chain disruption. The government has also requested from the Ministry of Defence examiners to increase HGV (heavy goods vehicle) testing capacity and sent one million letters to drivers who have an HGV licence to return to the industry. 

Various industries such as supermarkets and food chains have reported shortages of lorry drivers, while fuel deliveries have also been affected, with queues at petrol stations as consumers are panic buying despite calls from the government that the UK has plenty of fuel.

Petrol Crisis

Transport Secretary Grant Shapps has stated there was enough fuel and that people should only fill up when needed to avoid creating shortages. He said there were no supply problems at the six refineries and 47 storage facilities, and that drivers and motorists needed to “be sensible.” With the petrol crisis deepening, ministers have been forced to suspend competition law to help oil companies support petrol stations that are running dry, after days of panic buying. Following a meeting with oil companies on Sunday, business secretary Kwasi Kwarteng agreed to allow companies in the oil industry to work together, sharing information to keep petrol stations topped up.

The panic buying and shortage of drivers has also led the government to consider an emergency plan. The prime minister and senior members of the cabinet will examine “Operation Escalin” after BP reported that a third of its petrol stations had run out of the two grades of fuel, and the Petrol Retailers Association (PRA), said that 50% to 90% of its members were also running out, with more to follow.

Operation Escalin was first conceptualised as part of the planning for a no-deal Brexit, and involves  hundreds of soldiers being drafted in to drive a reserve fleet of 80 tankers. The Prime Minister will consider the Escalin and other proposals on Monday afternoon, in a meeting where ministers will also discuss ways to stop people from panic buying. Shortages could continue if people’s behaviour did not change.

The UK could also face a national shortage of turkeys in the run-up to December, with labour shortages due to Brexit.

 

If you are a business transferring funds overseas, contacting a currency specialist could save you time and money. Get in touch with Universal Partners FX and their dedicated team to discuss the latest market movements ahead of your currency exchange. If you are transferring funds to pay your employees abroad, get in touch with Universal Partners FX to find out how much you can save in your international money transfers. Universal Partners FX can provide invaluable help on efficient risk management and tailored solutions to your business’ transfer needs.

 

Despite Sterling rising yesterday following the Bank of England’s positive tone and the prospect of an early rate hike in 2022, on Friday it fell.

Asian and European stock markets were also down on Friday as well as risk-oriented currencies as the potential default of Evergrande can have significant repercussions on markets.

Pound and BoE

After the Bank of England’s meeting on Thursday, markets have brought their expectations forward as now the BoE is expected to start a rate hike cycle with a first increase in May 2022, followed by a second one in November 2022. While there are still uncertainties ahead for the pound, the British currency is still forecast to strengthen against the US dollar and the euro over the medium-term, as some analysts believe.  

Rate hike expected in early 2022

With markets now pricing in the first rate in the first quarter of 2022, the pound will find support, despite questions about the country’s economic recovery. Challenges will continue to exist, including unemployment and labour shortages that have become more prominent due to Brexit. Some analysts believe that if unemployment does not rise then the Bank’s Monetary Policy Committee could even add a small rate hike as soon as February. With market expectations for a rate hike already priced in, it is likely that the Bank will have to raise rates in early 2022 as it could otherwise create confusion and push the pound lower. For example, big banks such as JP Morgan have brought their expectations forward for a rate rise in early 2022 following the Bank’s announcement yesterday. Capital Economics said: "The Bank is moving closer to raising interest rates. As such, we now think that rates could rise in early 2022, rather than in 2023 as we had previously thought." They also added: "Given the gloomy tone of the recent news on economic activity, we had expected the MPC to place some weight on the downside risks to GDP growth.” However, the Bank’s minutes stressed price stability and the inflation target which remains the same. The Bank highlighted that growth uncertainties were external and depended on global supply chain limitations.

For Sterling, any news about when the rate hikes will start or the vote on QE will be key. Both Dave Ramsden and Michael Saunders voted to lower the purchase rate to £840bn instead of the £875bn. The fact that two policymakers want to tighten the policy is important.

Earlier interest rate hikes will offer more support to pound

With interest rate expectations and a first rate to take place for Q1 next year, the pound is expected to find support. It could rise even further if such expectations move even more forward.  While raising interest rates might not affect inflation, what other Central Banks do does have an effect on global markets and policy. The ECB and the Federal Reserve have both announced that they will begin the tapering and reduce their stimulus support, and if the Bank of England does not follow suit the pound could go lower, something that could push inflation to rise and import prices to go higher.

If you are a business transferring funds overseas, contacting a currency specialist could save you time and money. Get in touch with Universal Partners FX and their dedicated team to discuss the latest market movements ahead of your currency exchange. If you are transferring funds to pay your employees abroad, get in touch with Universal Partners FX to find out how much you can save in your international money transfers. Universal Partners FX can provide invaluable help on efficient risk management and tailored solutions to your business’ transfer needs.

 

If you need to transfer money to your own overseas account or to other businesses and employees abroad, you can find an online specialist currency transfer firm such as Universal Partners FX who will offer competitive exchange rates and cost-effective transfers. In a volatile and fast-moving market, it is best to choose a reliable currency transfer company who can keep up and provide consistency and security.

How to determine your currency transfer firm is reliable and reputable?

First, it is good to check whether your currency transfer provider is authorised and regulated by a recognised authority or regulator. In the UK, the specific legal body and authority of overseeing the financial services sector is the Financial Conduct Authority (FCA). A currency transfer company, for example, is obligated to make sure that their client funds are secure at all times, and it does so by keeping them separately from the firm’s own funds.

The FCA regulates the conduct of around 51,000 businesses. They are the prudential supervisor for 49,000 firms and sets the standards for around 18,000 firms. Established on 1 April 2013, the FCA took over responsibility for conduct and prudential regulation from the Financial Services Authority.

The FCA’s responsibility is to protect consumers such as yourself, as well as safeguard the integrity of the UK financial system. As an independent public body funded by the firms they regulate, they are accountable to the Treasury and to Parliament.

Avoid using your Bank

Don’t rely on your bank. From high costs and fees and high margins on exchange rates, your bank is not the ideal partner when sending funds. Instead find a reputable money transfer provider, like UPFX who can offer tailored assistance, competitive exchange rates and secure and fast delivery of your funds.

Monitor the markets

If you are sending funds regularly then you need to check what is happening in the financial markets and how the currencies you are exchanging could be affected by economic news and events. As a business, you want to make sure that you are not losing money when transferring your funds overseas, especially if you send big amounts of money to pay partners or employees overseas. To make sure you know which time is the best to transfer your funds, check an economic calendar or ask your currency transfer specialist. UPFX has a dedicated team to help you with any enquiry and publishes expert market insight on its website. Currency volatility is usually common before or after major Central Bank announcements or the release of important economic data such as inflation data, PMIs and employment figures.

Manage your risk

Again, your currency specialist can explain to you about the various risk management tools available to you and which ones you can use for your specific needs. A forward contract, for example, gives you the opportunity to secure today’s rate for a future transfer, so you can control what exchange rate you will get and how much it will cost you to transfer your funds.

Trading internationally? Save money with Universal Partners FX

If you are intending to start an international business or you are already dealing with international money transfers, you will need a cost-effective way to manage your overseas currency transfers. Universal Partners FX is the right partner for your foreign exchange. With UPFX, you can open a multi-currency account, send and receive money worldwide with low and transparent fees. You can also manage your money and send international payments 24/7 through UPFX’s easy-to-use online platform powered by Currency Cloud.

If you are an exporter or plan to start your international business, get in touch now with Universal Partners FX to find out how much you can save in your international money transfers.

 

The Bank of England remains on track to raise interest rates in the first half of 2022. The pound rose against the euro and US dollar following the bank’s update to keep rates the same. The Monetary Policy Committee voted 9-0 to leave the Bank rate at just 0.1% and to maintain its quantitative easing bond-buying programme at £895bn. Deputy governor Dave Ramsden and Michael Saunders, voted against this, as they wanted to stop the QE programme early by reducing the amount of UK government bonds the BoE buys. While the bank was not 100% yet positive as there are uncertainties about the global economy and the labour market, the pound is expected to regain some of its losses but not to climb to new highs.

According to Bloomberg, City traders have revised their forecast for the first interest rate to 0.25% after the Bank of England’s outlook for the UK economy has improved and that tightening of its QE programme could commence soon.  After Thursday’s meeting, markets now expect a 15-basis-point increase in March 2022, a month earlier than their expected one for May. They also expect a rise of 0.5% in November 2022. With markets now pricing an increase in March and two hikes by the end of next year, investors will be focusing on the bank’s November meeting when a new set of forecasts will be announced.

Inflation

The Bank of England has warned that inflation will rise above 4% by the end of this year, due to the energy crisis. The rise in gas prices is considered a risk to its projections for inflation and it has warned that inflation could remain above 4% into the second quarter of next year making things harder for households. The MPC expects that global cost pressures would prove temporary.

Growth forecasts lowered

The Bank of England has lowered its growth forecasts as supply chain problems are impacting output. Expectations for growth in the third quarter have been revised from 2.9% to 2.1%. The Bank has warned that supply problems such as access to raw materials and staff shortages are affecting economic growth. The Bank also highlighted that global recovery has lost momentum and inflationary pressures will continue.  

Tightening monetary policy

The case for tightening monetary policy seems now stronger. Consumer price inflation rose to 3.2% while global cost pressures and supply problems are pushing consumer goods prices higher. CPI inflation is expected to fall back to the bank’s 2% target in the medium term, but the bank has also pointed out that: “Indicators of households’ medium-term inflation expectations have increased in recent months, with the Citi/YouGov five-to-ten year ahead measure at its highest level since 2013 in September.”

The BoE is also under pressure, as other central banks such as the ECB and Federal Reserve have announced that they will begin unwinding their financial support. If the BoE does not act in the same timeline, Sterling could fall, pushing inflation and prices higher. A rising pound will push the cost of imports lower and will act as a deflationary force.

If you are a business transferring funds overseas, contacting a currency specialist could save you time and money. Get in touch with Universal Partners FX and their dedicated team to discuss the latest market movements ahead of your currency exchange. If you are transferring funds to pay your employees abroad, get in touch with Universal Partners FX to find out how much you can save in your international money transfers. Universal Partners FX can provide invaluable help on efficient risk management and tailored solutions to your business’ transfer needs.

The pound was lower on Wednesday after investors became less confident about an earlier rate hike by the Bank of England, which is now likely to be delayed due to weak economic data. A weak US dollar and a stronger risk sentiment following news that Evergrande would repay a yuan-denominated bond on Thursday have not helped to support the pound.

Risks for the pound

The main event for the pound this week is Thursday’s Bank of England decision, and investors seem to have moved from expecting a hawkish BoE to grasping the fact that an interest rate hike is now more than six-months away due to the release of disappointing economic data. The currency market is expecting at least two rate hikes by the end of 2022, but now such expectations are considered too optimistic. With the market pricing the fact of an earlier interest rate for some time now, the realisation that the tables have turned, and a rate hike might take a while longer, means that the pound could react by falling. Sterling could find support if the BoE clarifies its timeline for raising rates starting early next year, but this is unlikely, analysts have noted. The Bank’s expectations will also be shaped by the health of the labour market, especially after the furlough scheme is completed at the end of this month, and analysts expect unemployment to rise. The BoE will also take into account disappointing data for July, retail sales’ numbers in August, and high inflation.

The pound was also weaker against the euro as investors are waiting to hear form the Federal Reserve any hints on the direction it will take for its future policy, including whether it will start tapering its bond buying by November.

Factors that could support the pound

The possibility of Britain joining the North American free trade deal, an idea that has been shared by media, could boost UK-US trade and help offer support to Sterling. As a UK government figure said, the UK is interested in pursuing this option but “The ball is in the US’s court. It takes two to tango.”

The trade partnership between the US, Canada and Mexico, is now a possibility after Boris Johnson failed to secure a bilateral deal with Washington. It appears that a direct free trade agreement (FTA) with the UK is not something that the president Joe Biden will be interested in pursuing and the Prime Minister said that Biden “has a lot of other fish to fry.”

The UK government’s interest in joining the North American deal follows the opening of talks for the UK to become a member of the CPTPP Pacific trade group. The likelihood of Britain joining NAFTA is an attempt to secure a tariff-reduction deal as new barriers have been erected to trade with the EU with Brexit.

If you are a business transferring funds overseas, contacting a currency specialist could save you time and money. Get in touch with Universal Partners FX and their dedicated team to discuss the latest market movements ahead of your currency exchange. If you are transferring funds to pay your employees abroad, get in touch with Universal Partners FX to find out how much you can save in your international money transfers. Universal Partners FX can provide invaluable help on efficient risk management and tailored solutions to your business’ transfer needs.

The beginning of the new week has seen the pound fall as market sentiment deteriorated following fears the Chinese property sector will suffer from the Chinese mega developer Evergrande’s collapse. Additionally, fears of a global economic slowdown and a gas crisis have left the market in a risk off mode, with the pound lower against the safe havens of the US dollar, Yen and the Franc. Sterling was also lower against the euro and commodity currencies including the Australian dollar, New Zealand dollar and Canadian dollar.

Energy markets

The UK’s wholesale energy markets have risen recently due to a global increase in demand for gas after a prolonged cold winter that left gas storage facilities depleted, with increased energy demand across Asia. Prices have surged as a result of a global attempt to refill gas storages before the winter.

With half of the UK’s electricity coming from gas-fired power plants and a rising demand for gas power after a series of nuclear reactor outages and the recent closure of a major power cable that brings in electricity from France, the situation has generated concerns about the coming winter months.

The UK government is also taking part in discussions about a possible financial bailout to energy providers. Kwasi Kwarteng, the Business Secretary, has been in various meetings over the weekend and will continue to meet the heads of energy businesses this week, to explore the possible options amid warnings that many companies could go bust. One of the potential solutions that have been discussed is a bail-out fund and the industry is now fearing a financial collapse according to the FT.

Following his emergency meeting with energy companies on Monday, Kwarteng  tweeted that he will update MPs this afternoon, and that the government is looking at different options to protect customers and to they have continuity of supply if their supplier fails, through a “Supplier of Last Resort” or a special administrator if needed. The energy price cap will remain in place he confirmed. A spokesman for the Prime Minister told reporters: “The price cap remains in place, as I say, to protect consumers from sudden increases in global gas prices and it will save them money this winter.”

With the possibility of millions of customers being unable to be served by failing companies, supply energy companies are requesting support from the government, and a "Northern Rock-style bad bank" could be created to house such customers without losing money.

BoE

The gas crisis comes ahead of Thursday's Bank of England policy meeting which is a crucial event for the pound. The Bank could warn the gas crisis could slowdown growth and possibly push back the timing of an interest rate hike.

Evergrande

Another event that has rattled the markets was the news that the Chinese mega developer Evergrande is heading for a corporate restructuring that could see investors lose tens of billions of dollars. Shares in Evergrande have plunged 17% and the group’s massive debt problems could trigger a broader sell off across all financial markets. Evergrande's importance to the Chinese economy is huge, as its debts amount to around $447 billion (US$315b). This is more than three times the entire debt load of the New Zealand government and two-thirds of all outstanding Australian federal debt.

The rising natural gas prices and the energy crisis, the potential of produce shortages and surging inflation have already painted a rather dire image of the global economy. The Fed’s meeting this week and the German election create further uncertainty.  Monday’s major shock for the markets came from Evergrande’s meltdown and investors could possibly avoid China. These are now being factored in by the markets, and it will be especially revealing to see how the Fed will position itself in terms of another rate hike amid inflationary pressures.

The pound has hit a four-week low this Monday as investors turned to safer assets, but GBP currency traders will be looking at this Thursday’s BoE meeting for more guidance.

If you are a business transferring funds overseas, contacting a currency specialist could save you time and money. Get in touch with Universal Partners FX and their dedicated team to discuss the latest market movements ahead of your currency exchange. If you are transferring funds to pay your employees abroad, get in touch with Universal Partners FX to find out how much you can save in your international money transfers. Universal Partners FX can provide invaluable help on efficient risk management and tailored solutions to your business’ transfer needs.

The pound rose against the US dollar following strong UK labour-market numbers. British employers added a record 241,000 staff in August, pushing the total number of employees on company payrolls above pre-pandemic levels, official data showed on Tuesday.

The latest unemployment report by the Office for National Statistics shows job vacancies rose above one million for the first time since records began as the UK economy continues to recover from the Covid-19 pandemic, while payrolls rose by more than expected. The strong data will possibly help persuade Bank of England policymakers that perhaps UK monetary policy could be tightened sooner than expected.

Jobs data

The latest unemployment report showed the number of vacancies in the three months to August to have reached above one million, as firms struggled to fill positions mainly in the hospitality, transport and storage sectors. It also showed a lower unemployment rate and a monthly increase in August payrolls.

The ONS stated: “The fastest rate of growth was seen in other service activities, which grew by 93.3% (12,500), followed by transport and storage at 76.3% (20,300) and accommodation and food service activities at 75.4% (57,600). In the latter two categories labour demand has increased rapidly while staff availability fell because of a mix of employees leaving these sectors to find employment elsewhere and a reluctance of workers to return to their previous roles.”

Minister for Employment Mims Davies MP has welcomed the rise in payrolls and said: “As we continue to push ahead with our recovery, it’s great to see another significant fall in unemployment and the number of people on payrolls rising by 241,000 in August – the biggest monthly increase on record – showing our Plan for Jobs is working. We’re helping employers recruit for the record number of vacancies out there, particularly in growing sectors, and supporting people of all ages and backgrounds to overcome barriers, land their next role, and progress in work.”

While payroll employment is back at pre-pandemic levels, there are still many years ahead of recovery, with employment more than 700,000 down and long-term unemployment up 45%. There are still more than a million people furloughed and with the scheme ending this month, more people will be looking to find employment.  

Furlough scheme concerns

Economists and politicians are worried that with the furlough scheme ending this month, jobs recovery will be hurt, after the rise in payrolls and vacancies. A lot of furloughed staff might not even return to their jobs as a lot have had their wages subsidised and might not be kept into full-time employment.

There is also a skill shortage as many industries have reported a lack of available labour and hiring difficulties. With Covid adding more uncertainty after Brexit and the new national insurance tax adding more costs to employers, it is unclear how businesses will respond to future hiring needs.

While the data is positive for the pound, investors remain cautious ahead of Wednesday’s UK inflation data, which could show an increase in the core rate in August to 2.9% year/year from July’s 1.8%.

If you are a business transferring funds overseas, contacting a currency specialist could save you time and money. Get in touch with Universal Partners FX and their dedicated team to discuss the latest market movements ahead of your currency exchange. If you are transferring funds to pay your employees abroad, get in touch with Universal Partners FX to find out how much you can save in your international money transfers. Universal Partners FX can provide invaluable help on efficient risk management and tailored solutions to your business’ transfer needs.