Sterling Hits One-Month High on Strong UK Jobs Data
Sterling rose to $1.335, its highest level in nearly a month, after stronger-than-expected UK labor market data boosted expectations of a Bank of England (BoE) rate hike next month. The unemployment rate unexpectedly fell to 4.7% in the three months to August, its lowest level since July 2025, while regular wage growth accelerated to 3.7%, slightly above market expectations of 3.6%. The data followed a series of stronger-than-expected releases last week, showing that the UK economy expanded 0.1% in August while the trade deficit narrowed unexpectedly, adding to signs that economic activity is proving more resilient than anticipated. Investors now expect the BoE to raise Bank Rate to 4% at its November 5 meeting. The central bank has so far been the only major central bank yet to begin a policy-tightening cycle, but Governor Andrew Bailey’s recent remarks that the longer the war continues, the harder it will be for policymakers not to respond, suggest a rate hike could be approaching.
Sterling rose to $1.335, its highest level in nearly a month, after stronger-than-expected UK labor market data boosted expectations of a Bank of England (BoE) rate hike next month. The unemployment rate unexpectedly fell to 4.7% in the three months to August, its lowest level since July 2025, while regular wage growth accelerated to 3.7%, slightly above market expectations of 3.6%. The data followed a series of stronger-than-expected releases last week, showing that the UK economy expanded 0.1% in August while the trade deficit narrowed unexpectedly, adding to signs that economic activity is proving more resilient than anticipated.
Investors now expect the BoE to raise Bank Rate to 4% at its November 5 meeting. The central bank has so far been the only major central bank yet to begin a policy-tightening cycle, but Governor Andrew Bailey’s recent remarks that the longer the war continues, the harder it will be for policymakers not to respond, suggest a rate hike could be approaching.