DAVY VIEW

The end of the UK jobs furlough scheme today, which still supported 1.6m workers at end-July, could result in unemployment rising well above the current 4.6% rate. Volatile labour market readings in the coming months could lead investors to question whether the Bank of England (BOE) will raise interest rates to 0.25% by February 2022. The move also highlights that Rishi Sunak is now removing fiscal supports to start the process of deficit reduction and follows the decision to raise national insurance rates by 1.25% in 2022.