The British Pound eased on Tuesday after UK unemployment held above forecasts and private-sector wage growth slowed to a near six-year low.
Pound Sterling‘s early losses stayed contained on Tuesday as investors weighed a softer jobs backdrop against headline pay growth that narrowly beat forecasts.
The Office for National Statistics said the unemployment rate was 4.9% in the three months to June, unchanged from the previous period but above the 4.8% consensus.
The ONS cautioned against over-reading short-term Labour Force Survey changes and advised assessing them alongside payrolls, vacancies and other indicators.
Regular earnings growth edged up to 3.5%, versus expectations for 3.4%, while total pay growth slowed to 4.1% from a revised 4.3% and slightly exceeded the 4.0% forecast.
The earnings series was revised back to the start of the series after a seasonal-adjustment review.
That headline masked a sharp sector split.
Regular pay growth in the private sector fell to 2.8%, its weakest since the three months to October 2020, while public-sector growth reached 6.1% as the timing of NHS awards lifted the comparison.
Vacancies slipped to 707,000 in May to July, the lowest since late 2014 outside the pandemic.
Early payroll estimates indicated a 13,000 fall in July, matching June’s decline.
Sterling Reaction Stays Contained
By 09:06 BST, our exchange rate data showed GBP/USD at 1.3526, down 0.18% from the previous close.
GBP/EUR was 0.07% lower at 1.1688, while GBP/JPY was 0.07% higher at 216.05.
The mixed cross-rate performance underlined the influence of other drivers.
Renewed US-Iran tensions supported the Dollar, while recent intervention continued to shape Yen trading, limiting any clean attribution of the full session to the UK data.
ING developed-markets economist James Smith concluded that “the jobs market is cool”, a reading behind the bank’s forecast for no rate move until next spring and at least two cuts in 2027 unless the energy shock becomes severe and persistent.
Money markets nevertheless had around 30 basis points of Bank of England tightening priced by year-end, leaving a tension between softer domestic labour data and the inflation threat from energy.
The stabilisation counterpoint came from PwC UK senior economist Jake Finney, who called the release “relatively benign” because the jobs market is soft but “isn’t collapsing”.
The report strengthens the case for the Bank to resist near-term tightening, but Wednesday’s inflation release will determine whether Pound Sterling’s modest setback develops into a broader repricing.
Our currency coverage draws on live market data, official economic releases and published bank research.