The United Kingdom’s (UK) ILO Unemployment Rate steadied at 5.1% in the three months to November after reporting 5.1% in the quarter to October, data published by the Office for National Statistics (ONS) showed on Tuesday.
The data came in above the market forecast of 5.0%.
Additional details of the report showed that the number of people claiming jobless benefits rose by 17.9K in December, compared with a revised decline of 3.3K in November and the expected 18.8K gain.
The Employment Change data came in at 82K in November, against -17K recorded in October.
Meanwhile, Average Earnings, excluding Bonus, in the UK ticked up by 4.5% three months year-over-year (3M YoY) in November versus a 4.6% growth booked previously. The market expectation was for a 4.5% print.
Another measure of wage inflation, Average Earnings, including Bonus, advanced by 4.7% in the same period after increasing by 4.8% (revision) in the quarter through October. The data beat the estimate of 4.6%.
GBP/USD reaction to the UK employment report
GBP/USD stays uninspired by the release of the UK employment data. The pair is trading modestly gains on the day at 1.3434, as of writing.
Pound Sterling Price Today
The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.16% | -0.01% | 0.29% | -0.08% | -0.23% | -0.54% | -0.14% | |
| EUR | 0.16% | 0.15% | 0.46% | 0.09% | -0.06% | -0.38% | 0.02% | |
| GBP | 0.01% | -0.15% | 0.32% | -0.07% | -0.20% | -0.52% | -0.13% | |
| JPY | -0.29% | -0.46% | -0.32% | -0.37% | -0.52% | -0.84% | -0.43% | |
| CAD | 0.08% | -0.09% | 0.07% | 0.37% | -0.15% | -0.47% | -0.05% | |
| AUD | 0.23% | 0.06% | 0.20% | 0.52% | 0.15% | -0.31% | 0.11% | |
| NZD | 0.54% | 0.38% | 0.52% | 0.84% | 0.47% | 0.31% | 0.40% | |
| CHF | 0.14% | -0.02% | 0.13% | 0.43% | 0.05% | -0.11% | -0.40% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
The section below was published at 05:00 GMT as a preview of the UK labor market report.
UK Jobs Report Overview
The United Kingdom (UK) docket has the labor market report to be released by the Office for National Statistics (ONS) on Tuesday, later this session at 07:00 GMT.
UK Claimant Count Change for December is expected to rise by 18.8K, reflecting the number of people claiming jobless benefits. The reading was 20.1K in November. Meanwhile, the Claimant Count Rate was at 4.4% in the previous month.
UK Average Earnings, including bonuses, in the three months to November, are expected to accelerate by 4.6%, following 4,7% prior, while ex-bonuses, the wages are expected to rise by 4.5% against the previous 4.6%.
UK ILO Unemployment Rate (3M) may ease to 5.0% in the three months to November, from 5.1% prior. Employment Change showed a decline of 17K in the previous quarter.
How could the UK Jobs Report affect GBP/USD?
The UK jobs report may have a limited impact on the Pound Sterling (GBP) if it meets expectations. Any deterioration in labor market data could increase expectations for interest rate cuts by the Bank of England (BoE). Attention will then turn to the UK Consumer Price Index (CPI) and December Retail Sales data later in the week.
The GBP/USD pair could further gain ground as the US Dollar (USD) comes under pressure from rising uncertainty over the US–Greenland issue. US President Donald Trump said on Saturday that 10% tariff would be levied on goods from EU members, effective February 1, until the US is permitted to purchase Greenland. Meanwhile, French President Emmanuel Macron reportedly urged the European Union to activate its “trade bazooka,” a measure that could restrict US access to EU markets or impose export controls, among other potential countermeasures.
Technically, the GBP/USD pair is trading around 1.3440 at the time of writing. Daily chart technical analysis suggests that the pair holds above the nine-day Exponential Moving Average (EMA) and the 50-day EMA, keeping the short- and medium-term bias tilted higher. The rising averages support dips as long as the pair stays above them. The 14-day Relative Strength Index (RSI) at 53 (neutral) suggests momentum is balanced after recent gains. The immediate support is seen at the confluence of the nine-day EMA at 1.3428 and the 50-day EMA at 1.3390. A daily close under the medium-term average would open the doors to navigate the region around the eight-month low of 1.3010. On the upside, immediate resistance aligns at the three-month high of 1.3562 as the next barrier.
(The technical analysis of this story was written with the help of an AI tool.)
Employment FAQs
Labor market conditions are a key element to assess the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and thus economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels and thus monetary policy as low labor supply and high demand leads to higher wages.
The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy.
The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given its significance as a gauge of the health of the economy and their direct relationship to inflation.
Source: https://www.fxstreet.com/news/when-is-the-jobs-report-and-how-could-it-affect-gbp-usd-202601200500
