ExchangeRates.org.uk - The latest UK labour-market data was notably mixed, but a lower unemployment rate and stronger-than-expected underlying wage increases grabbed the headlines.
The Pound to Dollar (GBP/USD) exchange rate hit a 1-week high just above 1.2800 with the Pound to Euro (GBP/EUR) exchange rate also at a 1-week around 1.1700.
According to the latest ONS data, the UK unemployment rate declined to 4.2% in the three months to June from 4.2% previously and below consensus forecasts of 4.5%. The number of people on payrolls increased 24,000 for July after a 14,000 gain for June.
There was a large increase in the claimant count due to technical changes while vacancies continued to decline. Headline average earnings growth slowed sharply to 4.5% from 5.7% previously. This figure was distorted by base effects as NHS bonuses last year came out of the calculation.
There was a slowdown in underlying wages growth to 5.4% from an upwardly-revised 5.8% previously and the lowest reading for two years, but well above market expectations of 4.6%. Private-sector wages growth slowed to 5.2% from 5.6%. This was a notably mixed set of data, but the Bank of England will be wary over evidence of a tight labour market. At the margin, this will make a further near-term interest rate cut less likely.
This content was originally published on ExchangeRates.org.uk
