The British pound experienced a decline, falling below $1.33, reaching its lowest point since early August, as economic data indicated a potential slowdown in wage growth. This has fueled speculation that the Bank of England might implement further, albeit gradual, interest rate cuts.
- The British pound fell below $1.33, its weakest level since August 1.
- Wage growth slowed to 4.7% in June-August 2025.
- This marks the weakest pace since March–May 2022.
- The unemployment rate rose to 4.8%, exceeding the forecast of 4.7%.
- September payrolls decreased by 10,000.
- Money markets are pricing in almost nine basis points of Bank of England interest rate cuts by year-end.
The weakening of the British pound suggests investors are reacting to the possibility of more accommodative monetary policy. Weaker wage growth and a slightly rising unemployment rate are contributing to concerns about the strength of the UK economy, prompting increased expectations for interest rate cuts. This, in turn, is placing downward pressure on the value of the currency.