British employers hire more people in October than expected

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British employers hire more people in October than expected

The Bank of England's concerns about raising interest rates could soften after data showed British employers hired more people in October after a job-protecting scheme ended, causing the pound to rise on Tuesday.

Fears of a slowdown in the job market after the end of the furlough scheme on Sept. 30, prompted the BoE to surprise the market and keep rates on hold at its latest meeting, when sterling had its deepest fall against the dollar in 14 months.

The number of staff on businesses' payrolls in Britain rose by 160,000 in October compared to 29.3 million in October, 0.8% higher than in February 2020, according to data from tax authorities.

Joe Tuckey, FX analyst at Argentex, said that Tuesday's robust employment data may now renew confidence in an imminent hike by the Bank of England. He said that sterling may get some much needed uplift and there is cautious optimism that it will finally receive some much-needed uplift.

The pound was 0.3% higher against the single currency at 84.50 pence at the time of 1545 GMT.

The pound was up 0.1% at $1.3426 against a strengthening dollar, erasing some of its earlier gains after data showed U.S retail sales increased more than expected in October.

The pound has recovered some ground this week after it dropped to its lowest against the dollar in 11 months on Friday.

Andrew Bailey, BoE Governor, said that his vote to keep interest rates on hold earlier this month was a very close call. The lack of official data on what had happened to workers who were still on a furlough when the scheme ended made him want to wait.

The BoE could be the first major central bank to raise interest rates, but whether that initial increase happens soon or later next year has divided economists, polled by Reuters.

There are worries that a disagreement between Britain and the European Union over Northern Ireland could cause major trade disruption and harm the British economy, which is lagging that of other rich nations, as a result of the capping of sterling gains.