GBP Drops Against JPY as UK Wage Growth Cools, Rate-Cut Bets Rise
The British pound dropped against the Japanese yen in early London trading on Tuesday after the release of UK employment data showed slower wage growth, reinforcing market expectations that the Bank of England may cut interest rates sooner than previously anticipated.
According to the Office for National Statistics, average weekly earnings excluding bonuses rose by 5.4% in the three months to November, down from 5.6% in the previous period.
The unemployment rate ticked up to 4.4%, while the number of payroll employees fell by 47,000 in December, marking the first decline since mid-2021.
The data suggests that the UK labor market is loosening, which could ease domestic inflationary pressures and support a more accommodative monetary policy stance from the Bank of England.