| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 06:00 | United Kingdom | Average Earnings, 3m/y | April | 5.9% | 5.7% | 5.9% |
| 06:00 | United Kingdom | ILO Unemployment Rate | April | 4.3% | 4.3% | 4.4% |
| 06:00 | United Kingdom | Claimant count | May | 8.4 | 10.2 | 50.4 |
GBP traded little changed against its major rivals in the European session on Tuesday as investors responded to the latest data from the UK, which confirmed that the domestic labour market continued cooling in April.
The Office for National Statistics (ONS) reported this morning that the number of people in work in Britain fell by 139,000 in the three months through April, following a 178,000 decline in the previous three-month period. This marked the fourth straight period of decreasing job creation. Economists had predicted a drop of 100,000. At the same time, the UK’s unemployment rate rose to 4.4% from an unrevised 4.3% in the three months through March. This was the highest rate since September 2021 and surprised economists who had expected the reading to remain unchanged at 4.3%.
Today’s data also revealed that the private sector pay, excluding bonuses, slipped to 5.8% YoY in the three months through April from 5.9% YoY in the three months through March. This represented the weakest growth since the April-to-June period in 2022 (5.4% YoY). The overall wage growth, excluding bonuses was 6.0% YoY in February to April, the same as for the previous three-month period.
In addition, the ONS announced that the number of vacancies from March to May was 904,000, a decrease of 12,000 on the previous three-month period.
In general, the latest figures pointed to a gradual weakening of the UK labour market and prompted markets to increase their bets on an interest rate reduction by the British central bank this year.
According to Bloomberg, markets are now pricing in gnarly 10 basis points (bps) of policy easing at the BoE’s August meeting, compared to 7 bps a day ago, and are seeing 35 bps of cuts by the end of 2024, compared to 31 bps on Monday.
Tomorrow, investors will receive another important economic report - Britain’s April GDP data - which could impact investor expectations on the BoE’s interest-rate cuts.