Food for thought

The UK has now entered into its third phase of re-opening today, as hospitality venues can now welcome back customers indoors for the first time since 5th January. As the economy begins to recover, hiring and the overall health of the job market will be in focus as the Bank of England will look for full employment before any monetary stimulus is tapered. So far, graduate employers have ramped up hiring, with 18% increasing overall intake by 10% and many others keeping the same or increased levels of hiring when compared with pre-pandemic levels.

Since the end of March, job vacancies in the hospitality sector have surged and now stand at almost one million with hiring struggling to find any real traction. It’s thought more than 1 in 10 workers left the industry over the course of the pandemic, likely fueled by prolonged closures and the lack of full coverage by the furlough scheme. Between 400,000 and 600,000 European workers have left the UK, their decisions driven by the pandemic and Brexit meaning some have been unable to return. Many businesses are experiencing surges in demand thanks to the buildup that lockdowns have created with consumers much more willing to spend. Demand and supply for staff has suffered a disconnect as a result, with many venues not being able to open on the 17th of May.

Bottom line: Overall levels of employment in hospitality could begin to creep up, as the economy takes its final steps toward a full re-opening and the furlough scheme ends in September. However, there does appear to be a marked shift away from the sector with job security now being at the top of most people’s list. Hospitality roles have seen a slight up-tick in the average hourly rate on job search engines such as Indeed with many companies desperate to fill these vacancies. The hospitality industry has been one of the hardest hit sectors and the hope is that a full recovery is right around the corner, but the rate at which this happens remains to be seen.

The week ahead


The Pound gained for the second week in a row in its trade-weighted index and currently sits around 0.6% off 2021’s highs. The UK’s next stage of easing lockdown measures begins today with indoor seating now allowed across the hospitality sector, larger groups of people allowed to mix, and certain foreign travel allowed. This comes just days after scientists expressed concern over the possibility of greater transmissibility of the Indian variant which is slowly spreading across the country. However, markets show no concern over the risks of the new variant yet as GBP/USD began Monday’s session climbing above the 1.41 handle.

  • Tuesday’s labour market data is expected to show UK unemployment remained at 4.9% and average weekly earning remained at 4.5% in March.
  • Wednesday’s inflation data release is expected to show a significant uptick in UK inflation for the month of April. Year on year CPI is forecast 1.5% growth from 0.7% previously, while month on month is expected to double to 0.6% in April vs March.
  • On Friday, Markit’s preliminary PMI readings for May are expected to remain strong with manufacturing and services expected to read 60.7 and 62.1 while the composite reading is forecast 61.8.



The common currency closed last week relatively flat after recovering losses late on in the week. The Euro retreated as the US Dollar climbed before rebounding on Friday afternoon helping EUR/USD to close back above the 1.21 figure. While a strengthening vaccination programme, as well as recently improved European economic forecasts are helping to lift the Euro, broader market sentiment is the larger driver with US inflation a key concern for investors. This week’s Eurozone inflation estimates suggests the common currency area will follow suit with higher inflation, which may be a topic of interest for ECB President Christine Lagarde to discuss when she speaks on Thursday afternoon.  

  • Tuesday’s preliminary GDP figures for Q1 are expected to show -0.6% growth in the Eurozone on a quarterly basis and -1.8% on an annual basis.
  • Wednesday’s inflation data is forecasting an uptick in prices in April across the Eurozone at 1.6% year-on-year compared to March’s 1.3%.
  • On Friday, Markit’s PMI data releases are forecasting strong manufacturing growth in May at 62.6, while Services are expected to read 52.4, indicating slower expansion in the sector. The composite reading is expected to improve to 55.1 compared to last month’s 53.8.



The US inflation data release was last week’s key event for the US Dollar as it came in significantly higher than expected, boosting the US dollar mid-week before retreating again. The Federal Reserve retains its guidance that a stronger labour market and prolonged inflation is needed before tapering of bond purchases, so it is no wonder the US Dollar rally did not last. The finer details of the CPI print suggested a ‘re-opening’ effect, with inflation occurring in concentrated areas such as air travel fares and used cars. The Federal Open Market Committee’s April meeting minutes will be released this week providing greater detail on how the Fed plans to guide the economic recovery.

  • Monday’s Empire Manufacturing index for May is expected to dip to 24.0 after posting a strong 26.3 reading in March.
  • On Thursday, initial jobless claims are forecasting 455k people were made unemployed in the past week, slowing from 473k previously. The continuing claims figure is also expected to fall to 3640k versus 3655k previously.
  • Markit’s PMI figures are expected to show US services leading the economic expansion, forecasting a 64.5 reading for May compared to manufacturing’s 60.2. However, both forecasted figures are slightly lower than April’s actual figures.


If you'd like to discuss your foreign exchange requirements with one of our currency specialists, call us on +44 (0)20 3465 8200.