Pawel Adrjan, an economist at the British jobs website Indeed, commented: “Economic growth is currently as glacial as the winter weather, but the UK’s job creation engines are still running hot”.
Meanwhile, Chancellor of the Exchequer Sajid Javid reassured UK markets that the manufacturing sector would not suffer from the Government’s plan to ditch the European Union’s trade rules.
Mr Javid said: “We look forward with confidence as we strike that new free trade agreement with our European friends, as we strike new free trade agreements across the world, it will be a very important time for British business”.
“And I can see a British economy that continues to go from strength to strength”.
Sterling has remained resilient against the euro today despite ongoing fears that the Bank of England (BoE) could slash interest rates later this month.
Meanwhile, the euro struggled to gain on the pound despite this morning’s publication of Germany’s ZEW economic sentiment survey, which beat forecasts and rose from 10.7 to 26.7.
ZEW President Professor Achim Wambach said that economic sentiment in the Eurozone’s powerhouse economy had improved due to the US-China trade deal settlement last week.
However, Mr Wambach also added: “[T]he German economy developed slightly better than expected in the previous year. Although the outlook has improved, growth is still expected to remain below average”.
With doubts over the longevity of the US-China “phase one” trade deal remaining, however, we could see the EUR/GBP exchange rate begin to ease as a fears of the negative impact on Germany’s global trade-reliant economy increase.
The pound to euro exchange rate will remain sensitive to British economic developments this week, with tomorrow’s December public sector net borrowing report set to ease from £4.878 billion to £4.6 billion.
Any further indications of a flagging UK economy, however, would place further pressure on the BoE to cut its interest rates this month, a prospect that would prove pound-negative.