UK unemployment fell to 4.2% in June, with average earnings rising 5.4%, boosting the pound and dampening expectations for Bank of England rate cuts.
The British Pound surged past $1.28 on Tuesday after the UK's unemployment rate unexpectedly declined.
At $1.2825, GBP was up 0.46% against the dollar in forex markets and was up 0.25% at €1.1707 against the Euro.
The Office for National Statistics reported that the unemployment rate fell to 4.2% in June, surprising economists who had anticipated an increase to 4.5%. This marks the first drop in the unemployment rate since December.
Alongside the falling unemployment rate, Average Earnings grew by 5.4%, surpassing expectations of 4.6%. However, this was a slight deceleration from the previous growth rate of 5.7%.
The stronger-than-expected jobs data has been taken as a potential signal that speculated future interest rate cuts by the Bank of England may not be so necessary.
Attention will turn to key inflation data scheduled for release on Wednesday.
