The British pound experienced a decline, falling below $1.33 to its lowest point since August 1. This downturn is attributed to weaker-than-expected wage growth data, which has fueled speculation that the Bank of England may pursue further interest rate cuts, though at a gradual pace. Labor market indicators suggest a stabilizing, but not strengthening, situation.
- The British pound fell below $1.33, reaching its weakest level since August 1.
- Regular pay growth slowed to 4.7% in June–August 2025, the weakest pace since March–May 2022.
- The UK unemployment rate rose slightly to 4.8%, exceeding the forecast of 4.7%.
- September payrolls decreased by 10,000, offsetting a previous gain of the same amount.
- Money markets are pricing in almost nine basis points of Bank of England interest rate cuts by year-end, increased from five basis points.
The data suggests a potential weakening of the British pound, driven by expectations of monetary policy easing. Slower wage growth, coupled with a slight increase in unemployment and payroll fluctuations, indicates that the Bank of England might feel compelled to lower interest rates to stimulate the economy, applying downward pressure on the currency.
