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Britons’ Falling Real Wages Show Challenging Times Have Arrived

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  • Britons’ Falling Real Wages Show Challenging Times Have Arrived

It looks like those hard times the Bank of England warned about are here already.

Even as unemployment dropped to its lowest in more than four decades last quarter, U.K. workers saw their real earnings fall for the first time in 2 1/2 years, data from the Office for National Statistics showed on Wednesday. That’s particularly problematic for a nation that has relied on buoyant consumers to keep spending, not least as it enters negotiations to leave the world’s largest trading bloc.

The figures are almost certain to fuel the debate over living standards as Britain prepares for a general election on June 8. Real earnings are still below their level before the 2008 financial crisis, and their recovery over the past two years is now going into reverse as the weak pound pushes up prices. BOE Governor Mark Carney said last week that households will face “challenging times” in the second half.

“With increases in regular pay slowing again, earnings growth is now comfortably trailing behind inflation,” said Suren Thiru, head of economics at the British Chambers of Commerce. “If the disparity between pay and price growth continues to increase as we predict, household spending is likely to slow further, weakening overall economic activity.”

Regular pay adjusted for inflation fell 0.2 percent, the ONS said. Nominal earnings slowed to growth of 2.1 percent, an eight-month low. The unemployment rate fell to 4.6 percent, the lowest since 1975.

At the same time, inflation is heading toward 3 percent this year, squeezing consumer spending. In March alone, real earnings fell 0.5 percent, the biggest decline since July 2014. That’s already feeding through retail sales, which recorded their largest drop in seven years in the first quarter. Figures for April will be published on Thursday.

After Wednesday’s report, Chancellor of the Exchequer Philip Hammond said that government forecasts still show rising real wages for the next five years and that inflation will be “transient.”

Carney, whose forecasts assume that Brexit goes smoothly, last week highlighted the risk of rockier times ahead for British households. While officials see wages rebounding next year, the outlook for 2017 is subdued as uncertainty about future trading arrangements and higher costs brought about by the ailing pound lead employers to clamp down on costs.

The fall in unemployment also takes the jobless rate closer to the 4.5 percent that the central bank estimates is the level that can be sustained without generating inflation. For March alone, the rate was 4.3 percent. Yet for most BOE policy makers, the fact that earnings remain subdued despite a healthy labor market suggests, for now, there is still enough slack to keep interest rates at a record low.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Naira

Naira Falls to N500/US$1 at Black Market on Monday

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Naira - Investors King

Despite efforts by the Central Bank of Nigeria (CBN) to improve dollar liquidity across the foreign exchange segments and prop up Naira value, the Nigerian Naira dipped to N500 against the United States Dollar on Monday at the nation’s black market.

Last week, the CBN announced plans to increase forex allocation to Deposit Money Banks in a bid to ensure Nigerians access forex at a fair rate and not forced to patronise the black market operators with exuberant rates.

The CBN agreed to increase the amount allocated to banks for travellers, Small and Medium Enterprises among others. The banks also agreed to operate something akin to foreign exchange imprest account such that the coffers of banks will be replenished so long as they retire the initial amounts to the satisfaction of the CBN”, stated Mr. Osita Nwanisobi, the Acting Director, Corporate Communications Department at the CBN.

The Naira quickly gained against its global counterparts, improving to N493 against the American Dollar last week before resuming its long-term bearish trend to N500/US$1 at the black market on Monday 21, June 2021.

The embattled currency depreciated in value against both the Euro and British Pound, exchanged at N590 and N710, respectively.

At the NAFEX window, the CBN new adopted official rate, the Naira traded at N411.67 to a United States Dollar on Monday while investors transacted $94.17 million during the trading hours of Monday.

At the Bureau De Exchange section of forex, Naira sold for N495 per US Dollar, N715 to a British Pound and N603 to a Euro.

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Naira

Nigerian Naira Exchange Rates; Tuesday, June 22, 2021

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Naira - Investors King

 The Nigerian Naira lost N2 against the United States Dollar on Monday to N500 despite efforts by the Central Bank of Nigeria to prop the local currency value.

The embattled currency remained pressured at N710 to a British Pound and N590 to a single Euro.  Naira opened at N500 to a United States Dollar on Tuesday.

Naira Black Market Exchange Rates

Morning * Midday** Evening *** Final Rates

Date USD GBP EURO YUAN Canadian Australian
NGN BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL
22/06/2021 495/500* 703/710* 585/590* 62/69 400/410 300/322
21/06/2021 495/500 703/710 585/592 62/69 400/410 300/325
18/06/2021 492/498 700/710 585/595 62/69 400/410 300/325
17/06/2021 483/493 700/710 590/600 62/69 400/410 300/322
16/06/2021 497/502 707/713 600/606 62/69 400/410 300/322

Bureau De Change Naira Rates

Date USD GBP EURO
NGN BUY/SELL BUY/SELL BUY/SELL
22/06/2021 485/495 700/715 580/603
21/06/2021 480/490 680/710 550/603
19/06/2021 475/490 680/715 580/603
18/06/2021 475/485 680/715 580/603
17/06/2021 478/490 690/710 590/603
16/06/2021 495/500 707/718 600/609
15/06/2021 495/500 707/718 600/609
14/06/2021 490/498 705/718 600/608

Central Bank of Nigeria’s Official Naira Rates

Date Currency Buying(NGN) Central(NGN) Selling(NGN)
6/21/2021 US DOLLAR 409.2 409.7 410.2
6/21/2021 POUNDS STERLING 567.6422 568.3358 569.0294
6/21/2021 EURO 486.5797 487.1743 487.7688
6/21/2021 SWISS FRANC 444.0586 444.6012 445.1438
6/21/2021 YEN 3.7166 3.7212 3.7257
6/21/2021 CFA 0.7231 0.7331 0.7431
6/21/2021 WAUA 583.9237 584.6372 585.3507
6/21/2021 YUAN/RENMINBI 63.2634 63.3412 63.4189
6/21/2021 RIYAL 109.1113 109.2446 109.3779
6/21/2021 SOUTH AFRICAN RAND 28.7174 28.7525 28.7876

 

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Naira

Naira Exchange Rates; Monday, June 21, 2021

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Naira Dollar Exchange Rate - Investors King

The Nigerian Naira continues its decline against global counterparts after gaining on the back of the Central Bank of Nigeria’s proposed increase in foreign exchange supply to all forex operators across the country.

Naira gained on the parallel market to exchange at N493 against the United States Dollar on Tuesday 15, June 2021 before dropping to N497 on Wednesday 16, June 2021.

The local currency plunged as low as N502 to a United States Dollar on the parallel market before the CBN announced its plans to up liquidity in an effort to ease scarcity and speed up business activities in the largely import-dependent economy. See the Naira exchange rates across various sections of foreign exchange markets.

Naira Black Market Exchange Rates

Morning * Midday** Evening *** Final Rates

Date USD GBP EURO YUAN Canadian Australian
NGN BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL BUY/SELL
21/06/2021 495/500 703/710 585/592 62/69 400/410 300/325
18/06/2021 492/498 700/710 585/595 62/69 400/410 300/325
17/06/2021 483/493 700/710 590/600 62/69 400/410 300/322
16/06/2021 497/502 707/713 600/606 62/69 400/410 300/322

Bureau De Change Naira Rates

Date USD GBP EURO
NGN BUY/SELL BUY/SELL BUY/SELL
21/06/2021 480/90 680/710 550/603
19/06/2021 475/490 680/715 580/603
18/06/2021 475/485 680/715 580/603
17/06/2021 478/490 690/710 590/603
16/06/2021 495/500 707/718 600/609
15/06/2021 495/500 707/718 600/609
14/06/2021 490/498 705/718 600/608

Central Bank of Nigeria’s Official Naira Rates

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