Pound to India Rupee Exchange Rate Falls on UK Data & Budget

March 18, 2015 - Written by Frank Davies

STORY LINK Pound to India Rupee Exchange Rate Falls on UK Data & Budget

The Pound weakened against the Indian Rupee and declined against the majority of its most traded peers as political concerns over the May 7 general election and the publication of weaker than forecast wage growth data weighed upon sentiment for the UK currency.

Data released by the London based Office for National Statistics (ONS) showed that the pace of growth in British workers pay slowed by a bigger margin in the first month of the year. The report showed that weekly earnings, including bonuses, increased by just 1.1% in January compared to the same month from the year earlier. The figure was a slowdown from the 2.4% growth figure seen in the preceding month. Wages excluding bonuses rose by 1.6% on a monthly basis, disappointing forecaster expectations for a figure of 1.8%.

A separate report showed that the number of Britons in work increased by 143,000 to a total of 30.939 million in the three months to January, the national employment rate rose to an all-time high level of 73.3%. The number of unemployed people fell by 102,000 to 1.856 million. The number of people claiming unemployment benefit in February fell by 31,000, compared with economists’ forecasts of a fall of 30,000.

‘The economic recovery under way should be much further ahead than it is. The 3.2 million increase in population since 2007 has led to additional economic activity in the UK, as would be expected. The new jobs being created are mainly low-skilled, low-paid and very precarious jobs. Even skilled workers in the UK face being undercut while wages are stagnant of falling in real terms. Most workers have seen little or no evidence of any recovery in living standards based on investment and productivity gains,’ said Paul Kenny, the general secretary of the GMB Union.

Minutes from the Bank of England also disappointed as they suggested that policy makers remain concerned over inflation and caused speculation to rise that the central bank will choose to delay rasing interest rates until later than initially forecast.

There was an ounce of expectation that they would not sound as dovish as last time round. The minutes are likely to make traders a little more cautious ahead of the much-anticipated US Federal Reserve policy meeting. The Indian Rupee will give up ground against its major peers if there is any sign that the Fed is moving closer to hiking interest rates in the USA.

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