How deep will the hole be?

The GBP has remained remarkably strong recently as I mentioned here. However, the latest set of jobs data have shown that cracks are sadly starting to appear for the UK as the furlough scheme heads towards its wind down in October.

The UK's finance minister always said that every job can't be protected and the Bank of England is forecasting a jobless rate of 7.5% by the end of this year. The latest jobs data from the UK yesterday show some of the COVID-19 induced slowdown starting to appear in the data.

Employment starts to show the strain

Employment is now down 220K for Q2 and the UK payrolls data show that employment has fallen by 730K since March. The unemployment rate is steady at 3.9%, but that is artificially held where it is due to the furlough scheme which is paying inactive workers. Also, remember that some people had given up looking for work and were therefore not considered unemployed.

Pay fell by the most in over 10 years from the April to June period (1.2%) which is indicative of how workers on the UK's job retention scheme only receive 80% of their pay.

How deep will the hole be?