UK unemployment holds at 4.9% while wage growth accelerates, pressuring the pound amid broader risk aversion.
The British pound fell to 1.3522 against the US dollar after UK employment data missed expectations, reinforcing concerns over persistent inflationary pressures. Unemployment remained steady at 4.9% for the three months to June, defying forecasts of a drop to 4.8%, while job growth slowed sharply to 83K from 147K in May.
Wage inflation picked up, with average earnings excluding bonuses rising 3.5% year-on-year, up from 3.4% previously. The data suggests sustained labor market tightness, complicating the Bank of England’s inflation fight. Meanwhile, rising geopolitical tensions in the Middle East bolstered demand for the safe-haven dollar.
The dollar’s rally remained limited, however, as broader market sentiment stayed cautious ahead of further developments in US-Iran negotiations.