Pound Steadies as UK Jobs Market Cools Amid Rate Hike Uncertainty

The Pound Sterling maintained its steady pace against the Euro and US Dollar following the latest UK jobs report, which showed further cooling in employment and private-sector wage growth. This reinforces expectations that the Bank of England will have little need to raise interest rates this year.

The unemployment rate held steady at 4.9% in the three months to June, while employment rose by 83,000 over the same period, which is well short of the consensus forecast near 129,000. Private sector regular pay growth slowed to 2.8%, the softest reading since late 2020, while overall regular earnings growth edged up to 3.5%.

The UK jobs market has cooled to healthy levels where it is no longer an inflationary driver, and rate hikes look unlikely based on the jobs data. However, this week's inflation data could have more of an influence, particularly with the upcoming CPI release on Wednesday, which is expected to rise to 2.9%. The core measure is expected to stay fairly steady at 2.5%.