Pound Drops as UK Unemployment Hits Five-Year High, Wage Growth Slows

The pound fell after data showed a rise in Britain's unemployment rate to a five-year high, with cooled wage growth adding to the case for further Bank of England rate cuts. Sterling dropped against the dollar and euro as markets expect more interest rate reductions amid slowing inflation expectations.

The British pound depreciated on Tuesday following the release of data indicating an increase in the country's unemployment rate to a five-year high, coupled with a slowdown in wage growth.

This economic development bolsters the argument for the Bank of England to consider further interest rate cuts, as seen by the pound's fall of 0.55% against the dollar and a dip against the euro.

Analysts foresee additional rate cuts by the BoE this year, with inflation expected to align with its target later this year, even as the pound shows resilience against the backdrop of global economic uncertainties.

(With inputs from agencies.)