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Sterling rises despite tremendous rise in jobless claims

Sterling rises despite tremendous rise in jobless claims

The sterling rose during Tuesday's trading despite a rise in the number of applicants for unemployment benefits in Britain to the highest level since 1996 in April, the first month that the government implemented the country's total closure measure.

As of 09:01 GMT, the British pound trader higher against the US dollar at 1.2250, while the highest level recorded during the session was at 1.2268.

The sterling has resumed its recovery for a second straight session after hitting a low of 1.2074 the previous session, the lowest level since March 26.

Against the euro, the British currency rose by 0.16 percent to trade at 1.1182, while the highest level recorded during the session was at 1.1216.

Data released by the Office for National Statistics showed that the number of jobless increased by 856,500 to 2.097 million, an increase of 69%. Forecasts were in favor of an increase by 676,500.

However, unemployment fell to 3.9 percent from January to March, which covers only one week of government closure measures, compared with the previous reading of 4.0 percent.

Employment levels rose by 211,000 in the first three months of the year, compared with a 50,000-rise estimated by analysts.

Unemployment is expected to reach 10%

The Bank of England has warned that the British government is heading towards its biggest economic recession in more than 300 years, as the government closes most of the economy in order to slow the spread of the coronavirus.

Moreover, financial experts warned of a rise in the unemployment rate to 10 percent in the second quarter despite the state's measures to pay workers part of their wages during their temporary layoff.

British Finance Minister Rishi Sonak said On Monday that the number of employees within the state's employee support program had reached 8 million, with more than 2 million applications submitted under a parallel program for the self-employed.

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