Pound Slips as UK Labour Market Shows Signs of Cooling

The British pound dipped slightly on Tuesday after data indicated that the UK labour market is slowing down. The unemployment rate remained at 4.9% in June, surpassing economists' expectations of a drop to 4.8%. The number of open job vacancies also fell to 707,000 in the three months to July, the lowest since 2021.

Private sector regular earnings rose by 2.8% year-on-year during the three months to June, marking the weakest growth since October 2020. This data points to a cooling labour market, which may lead the Bank of England to keep interest rates on hold until next spring before cutting them at least twice in 2027.

The pound fell 0.1% against the dollar to $1.352, but has recently benefited from factors pushing down the US dollar. The euro zone's currency, the euro, rose 0.05% against the pound to 85.54 pence.