The unemployment rate rose from 4.3% to 4.4%, with employment sliding by 140k after a 178k decline in March. Economists forecast employment to fall by 100k and a 4.3% unemployment rate.
According to the Office for National Statistics,
- The UK Claimant Count for May increased by 50,400 after a rise of 8,400 in April.
- Job vacancies fell by 12,000 from March 2024 to May 2024. Vacancies remained above pre-COVID-19 levels despite dropping for the 23rd consecutive period.
Bank of England Monetary Policy Implications
Elevated wage growth could support investor expectations of the Bank of England standing pat in June. Elevated wage growth could fuel consumer spending and demand-driven inflation. Sticky inflation could delay the timing of a Bank of England rate cut.
Nevertheless, the downward trend in employment and higher unemployment rate could signal a softer wage growth outlook, leaving a near-term 2024 BoE rate cut on the table.
GBP/USD Response to the UK Labor Market Data
Before the June UK labor market report, the GBP/USD fell to a low of $1.27169 before climbing to a high of $1.27388.
However, the GBP/USD reacted to the UK labor market data, rising to a high of $1.27397 before sliding to a low of $1.27213.
