UK unemployment unexpectedly climbed to 5% in March, weighing on GBP despite a lower-than-expected claimant count.
The EUR/GBP pair regained ground near 0.8680 in early European trading after UK unemployment data showed a surprise increase. The ILO unemployment rate rose to 5% for the three months to March, up from 4.9% previously, defying expectations for stability.
April’s claimant count came in at 26.5K, below the 27.3K forecast, while March’s figure was revised sharply lower to 4.9K from 26.8K. The mixed data provided limited support for GBP, which remained under pressure amid political uncertainty in the UK.
Hawkish signals from European Central Bank officials continued to bolster the euro, offsetting concerns over UK leadership instability. Traders await further cues on monetary policy divergence between the ECB and Bank of England.