The United Kingdom’s (UK) ILO Unemployment rose to 4.8% in the three months to August after reporting 4.7% in the previous reading, data published by the Office for National Statistics (ONS) showed on Tuesday.
The data came above the market expectations of 4.7%.
Additional details of the report showed that the number of people claiming jobless benefits rose 25.8K in September, compared with a revised increase of 17.4K in August.
The Employment Change data arrived at 91K in August versus 232K in July.
Meanwhile, Average Earnings, excluding Bonus, in the UK edged higher by 4.7% three months year-over-year (3M YoY) in August versus a 4.8% growth booked previously. The market consensus was for a 4.7% reading.
Another measure of wage inflation, Average Earnings, including Bonus, increased by 5.0% in the same period after accelerating by 4.7% in the quarter through July. The data beated the estimate of 4.7%.
GBP/USD reaction to the UK employment report
GBP/USD attracts some sellers following the release of the UK employment data. The pair is trading 0.24% lower on the day at 1.3300, as of writing.
Pound Sterling Price Last 7 Days
The table below shows the percentage change of British Pound (GBP) against listed major currencies last 7 days. British Pound was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 1.16% | 1.40% | 0.99% | 0.79% | 2.26% | 2.57% | 0.84% | |
| EUR | -1.16% | 0.25% | -0.14% | -0.35% | 1.12% | 1.40% | -0.19% | |
| GBP | -1.40% | -0.25% | -0.40% | -0.60% | 0.91% | 1.12% | -0.43% | |
| JPY | -0.99% | 0.14% | 0.40% | -0.18% | 1.29% | 1.47% | -0.18% | |
| CAD | -0.79% | 0.35% | 0.60% | 0.18% | 1.44% | 1.72% | 0.15% | |
| AUD | -2.26% | -1.12% | -0.91% | -1.29% | -1.44% | 0.14% | -1.32% | |
| NZD | -2.57% | -1.40% | -1.12% | -1.47% | -1.72% | -0.14% | -1.62% | |
| CHF | -0.84% | 0.19% | 0.43% | 0.18% | -0.15% | 1.32% | 1.62% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
The section below was published at 04:12 GMT as a preview of the UK labor market report.
UK Jobs Report overview
The UK labor market report is due for release at 06:00 GMT this Tuesday and is expected to show that the ILO Unemployment Rate held steady at 4.7% during the three months to September. Meanwhile, the Average Weekly earnings, including bonuses, are expected to rise 4.7% during the reported period, while excluding bonuses, the growth in wages is seen slowing to 4.7% from 4.8% previously.
According to Michael Hewson, an independent analyst, “the prospect of further rate cuts from the Bank of England in the near term remains less likely than the government would like. In the 3 months to July, wage growth slowed only modestly to 4.8%, from 5%, while unemployment remained steady at 4.7%.”
How could the UK Jobs Report affect GBP/USD?
A negative surprise in the UK’s wage growth numbers could accentuate the recent leg down in the British Pound (GBP) and drag the GBP/USD pair back towards the 1.3300 round-figure mark. Some follow-through weakness might expose the 1.3260 region, or an over two-month low touched last Friday.
Meanwhile, any reaction to upbeat readings is more likely to be limited on the back of the UK’s fiscal concerns, though might still assist the GBP/USD pair to surpass the 1.3365 immediate hurdle and aim towards reclaiming the 1.3400 round figure. The momentum could extend further towards the next relevant hurdle near the 1.3440 area en route to the 1.3500 psychological mark.
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