Sterling Stumbles: Rising Unemployment and Slowed Wage Growth Impact UK's Economy

The pound fell after December data revealed increased UK unemployment and slower-than-expected wage growth. The unemployment rate rose to 5.2% while wage growth slowed to 4.2%. The Bank of England might consider further rate cuts as Sterling has gained 0.8% this year against the dollar amidst economic unpredictability.

The British pound experienced a decline on Tuesday as data indicated a rise in the UK's unemployment rate for December along with a slowdown in wage growth, exceeding expectations. This economic situation could add pressure on the Bank of England to contemplate additional rate cuts to stimulate growth.

In December, the unemployment rate registered at 5.2%, a slight increase from November's 5.1%, aligning with economists' predictions. Meanwhile, average weekly earnings over a three-month period saw year-on-year growth slow more than anticipated, landing at 4.2% compared to 4.6% in the preceding month.

Despite these figures, the pound has appreciated approximately 0.8% against the dollar since the start of the year. This rise stems partly from the U.S. dollar's struggles with erratic policies under the Trump administration, coinciding with emerging signs of resilience in the British economy.

(With inputs from agencies.)