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Moment of truth for UK jobs

Today’s news headlines:

‘Sunak sets up moment of truth for UK jobs market’. Yesterday, British Chancellor Rishi Sunak confirmed that the treasury will end the £39bn furlough scheme at the end of October and replace it with a German-style subsidy scheme for those in part-time work. The move means it’s now crunch time for employers to decide which jobs remain viable and which they believe will ultimately be lost to the crisis. Employees will need to be working at least a third of their usual hours to qualify for the scheme, which could cost up to £10bn over the next six months. (Financial Times)

‘Democrats prepare $2.4tn stimulus plan in push to kickstart talks’. House of Representative Democrats are putting together a new economic stimulus plan which costs less than the existing programme but is possibly still too high to achieve a deal with Republicans. House Speaker, Nancy Pelosi, asked members to compose a scaled-back plan as a basis for renewed talks on a relief package. No agreement could lead to a sharp slowdown in growth in the fourth quarter as economists have previously relied on at least $1tn in additional stimulus in earlier forecasts. (Financial Times)

Today's events, rates, and data 

  • Stocks rose and the US Dollar fell in late trading yesterday and overnight on positive sentiment over negotiations on a new US fiscal stimulus bill. The Pound received a boost over Chancellor Sunak’s plan to save more jobs but remains susceptible to further downside moves. European and US equity futures point towards further gains throughout the day.

Today's events

UK Public Sector Net Borrowing: 35.2B vs 14.7B previously
US Durable and Core Durable Goods Orders: 1.30pm

Interbank rates:

GBP/USD: 1.2775
GBP/EUR: 1.0950
EUR/USD: 1.1665
USD/CAD: 1.3360