over 2 years ago • 3 mins
Data out on Tuesday showed that UK employment is back to pre-pandemic levels, as the country’s do-gooders commit to staying six pints apart at all times.
What does this mean?
Plenty of UK companies have been forced to let staff go in the last 18 months, with the country’s hospitality sector hit particularly hard. But British pub-goers are nothing if not dedicated to their local, and they’ve been more than happy to get the industry back on its feet. That helped boost the number of employed Brits by a record 207,000 last month. There are still over a million job vacancies still up for grabs too, which might be no bad thing: the government ditched economic support for a million workers last month, and they might need those posts pronto if their pandemic-bruised employers can’t afford to keep them on.
Why should I care?
Zooming in: Brexit doesn’t play nice.
The jobs market isn’t all rainbows, mind you: there’s still a shortage of lorry drivers and food sector workers, both of which are vital to a sustained economic recovery. And while the government has brought in measures to allow foreign workers to fill the roles, that’s only a temporary fix. Businesses, then, are asking for those measures to be extended, as well as calling for more investment in training up UK workers so they can play their part.
For markets: To raise or not to raise.
This update might prove to the Bank of England that the country’s recovery is coming along nicely, which could encourage it to press ahead with plans to raise interest rates. But analysts aren’t convinced: they reckon price rises are putting enough pressure on spenders, and that any rate increases could derail the recovery. That might be why those same analysts think the British pound will fall by 4% before the year’s out.
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Europe issued its first-ever green bond to record demand on Tuesday, which makes you wonder if there’s a more popular Bond in the world right now.
What does this mean?
Green bonds – those used to raise money for environmentally friendly projects, like clean transport and energy-efficient buildings – have been proving popular with an increasingly eco-minded investor base. In fact, the market grew by 95% a year between 2007 (the year the first green bond was issued) and the end of 2020, when the total amount raised also hit the $1 trillion mark.
The European Union (EU) has stayed out of the space until now, but that all changed when it issued $14 billion worth of green bonds on Tuesday. Trouble was, it completely underestimated demand, with investors putting in $156 billion worth of orders – the most for green bonds ever. Sit tight, y’all: the EU’s planning to sell nearly $275 billion more over the next few years.
Why should I care?
The bigger picture: Money talks.
These green bonds are caught in a virtuous circle right now. See, high demand for the assets pushes up their price and drags down their yields, which subsequently brings down their interest rates. This, at a time when the equivalent traditional bond’s yield – and in turn interest rate – is higher. That means issuers can raise funds for green projects much more cheaply than they can non-green projects, which incentivizes them to think more sustainably.
Zooming out: Green bonds have banks’ blessing.
Talk about the gift that keeps on giving: data from Bloomberg shows investment banks have earned $3.6 billion in fees this year from helping sell bonds advertised as “green”, “social”, or “sustainable”. Compare that to the $1.6 billion they’ve made doing the same thing for fossil fuel companies, and banks might be happy enough for this trend to keep accelerating.
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