Pound Sterling Holds Steady Amid Cooling UK Jobs Market
The Pound Sterling held steady against both the Euro and US Dollar in response to the latest UK jobs report, which showed a cooling of employment and private sector wage growth. This development is expected to reinforce expectations that the Bank of England will have little need to raise interest rates this year.
The data released on Tuesday revealed that unemployment held steady at 4.9% in the three months to June, but employment rose by only 83,000, short of the consensus forecast near 129,000 and the weakest rise in five months. Vacancies dropped to 707,000 in July, their lowest level since 2021.
Liz McKeown, Director of Economic Statistics at the ONS, noted that 'the labour market picture is little changed overall, with some softening still evident.' This sentiment was echoed by ING, who observed that 'ongoing weakness in private-sector hiring and wage growth suggests the bar is still relatively high for a rate hike in 2026.' They predict that the Bank of England will remain on hold this year and resume rate cuts from spring 2027.