The unemployment rate rose from 4.3% to 4.4%, with employment falling by 140,000 after a drop of 178,000 in March. Economists predict a drop of 100,000 jobs and an unemployment rate of 4.3%.
According to Office for National Statistics,
- The number of claimants in the UK for May increased by 50,400 following a rise of 8,400 in April.
- Job vacancies decreased by 12,000 between March 2024 and May 2024. Job vacancies remained above pre-COVID-19 levels, despite declining for the 23rd consecutive period.
Implications for Bank of England monetary policy
Strong wage growth could support investor expectations for Bank of England stability in June. High wage growth could fuel consumer spending and demand-pull inflation. Persistent inflation could delay the Bank of England’s timetable for a rate cut.
Still, the downward employment trend and rising unemployment rate could signal a more moderate outlook for wage growth, leaving a short-term BoE rate cut on the table in 2024.
GBP/USD Response to UK Labor Market Data
Prior to the June UK Labor Market Report, GBP/USD had fallen to a low of $1.27169 before recovering to a high of $1.27388.
However, the GBP/USD reacted to UK labor market data, reaching a high of $1.27397 before sliding to a low of $1.27213.
