Pound Remains Weak as UK Jobs Data, BoE Decision Loom

The British pound steadied at $1.33, near its weakest level since April 7, as investors assessed fresh UK labor data ahead of the Bank of England’s policy decision and the Makerfield by-election results, which could influence Labour’s leadership and economic agenda. UK unemployment unexpectedly fell to 4.9% in the three months to April, below forecasts of 5.0%, while wage growth accelerated to 4.4%, surpassing the 4.0% estimate. Private sector earnings matched expectations at 2.9%, easing from 3.0% previously, which may reassure BoE officials that wage-driven inflation pressures remain contained. Later today, the Bank of England is widely expected to hold rates, but any dissent among policymakers could signal a hawkish shift. This follows the Fed’s decision to maintain rates, though nine of its 19 policymakers now anticipate at least one hike this year.

GBPUSD decreased to 1.33, the lowest since April 2026. Over the past 4 weeks, British Pound US Dollar lost 0.92%, and in the last 12 months, it decreased 0.81%.

The British pound edged lower to $1.34 as traders digested a softer-than-expected inflation report ahead of the Bank of England’s monetary policy decision on Thursday. UK consumer price inflation unexpectedly held steady at 2.8% in May, below expectations of a rise to 3%. Core inflation increased to 2.6%, slightly under forecasts of 2.7%, while services inflation accelerated to 3.7% from 3.2%, broadly in line with expectations. The data suggested that underlying price pressures were less pronounced than feared, reinforcing the cautious, wait-and-see approach favored by some Bank of England policymakers. The central bank is widely expected to leave its benchmark interest rate unchanged at 3.75% this month as it balances still-elevated inflation against a weakening labor market and an economic contraction in April. Investors expect only a single rate increase this year, with a 25bps rise not fully anticipated until December.