UK unemployment rose to 5% in March, exceeding forecasts, while jobless claims surged to 26.5K, pressuring the GBP.
The British Pound (GBP) retreated to session lows near 1.3400 against the US Dollar (USD) after UK unemployment data showed a sharper-than-expected deterioration. The unemployment rate climbed to 5% in March, up from 4.9% and above market expectations of no change.
Jobless benefit claimants jumped by 26.5K in April, a significant increase from the 4.9K rise in March. Meanwhile, average earnings including bonuses accelerated to 4.1% year-on-year in the three months to March, adding to inflationary concerns and complicating the Bank of England’s policy outlook.
Political uncertainty in the UK also weighed on the currency, though comments from potential leadership contender Andy Burnham eased some fiscal concerns. Lower US yields and oil prices provided limited support for the USD.