GBP Gets Boost as BoE's Saunders Points to Rising Jobless Rate

On February 18, 2021, BoE's Saunders indicated that the jobless rate in the UK has risen markedly. This development is seen as a potential positive for the GBP, with some traders pointing out that increased unemployment leads to 'spare capacity,' which can be beneficial for currency values.

However, not all experts agree on this assessment. Some argue that inflation cannot exist until demand exceeds supply, and that the current situation does not meet these conditions.

Another trader suggested that stagflation is unlikely to occur in these circumstances, as it typically requires a weak economy with price increases, which is not currently the case.