UK Unemployment Rises, Spurs Bank of England Rate Cut Speculations

The UK's unemployment rate hit 5.2%, its highest in a decade excluding pandemic periods, as wage growth slowed. This has heightened expectations of a Bank of England rate cut. The labour market shows signs of stabilisation despite wages and employment figures remaining under review.

The United Kingdom's unemployment rate has increased to 5.2%, marking the highest level outside of the pandemic period in over a decade. Alongside a slowdown in wage growth, this has spurred investor expectations for a potential interest rate cut by the Bank of England.

The increase in unemployment, reported by the Office for National Statistics, coincides with a dip in sterling against the dollar and a shift in market predictions regarding the BoE's next move. Analysts argue that the quality of unemployment data has seen improvement despite previous pandemic-related disruptions.

Private sector wage growth has also decelerated, indicating a cooling job market. Market watchers are bracing for changes ahead, especially given the influence of economic measures introduced by finance minister Rachel Reeves.

(With inputs from agencies.)