UK jobs preview: Another bitter disappointment may find a vulnerable GBP

  • The pound has been suffering from a poor GDP read for April.
  • A bitter disappointment in the same month's jobs report may be on the cards. 
  • GBP/USD may be unprepared for this outcome, potentially extending its falls.

UK economic output has already been hit from Brexit uncertainty – and the job market may suffer the same fate. UK GDP dropped by 0.4% in April, far worse than 0.1% that was expected. Manufacturing production was hit hardest with a plunge of 3.9% in April. 

Economists expect the unemployment rate to rise from the historic low of 3.8% in March to 3.9% in April, but that may be too optimistic – as the drop in output may have already triggered a substantial loss of jobs. 

UK jobs figures expectations June 11 2019

And while trends in employment lag behind the economic activity, stockpiling towards Brexit – which was supposed to happen on March 29th – may have likely triggered a "payback effect" in April. The staff that was hired in March ahead may have been laid off as early as April.

Moreover, the claimant count change rose in April by 24,700 and this increase may affect the jobless rate. Unemployment benefits have been on the rise for many months while the jobless rate continued falling – this anomaly may now come to an end – perhaps worse than expected. 

Expectations for wages also seem too high. Average earnings growth has decelerated to 3.2% in March and is now projected to rise back to 3.4% – the optimism seems unwarranted. 

Overall, there is a higher chance of a disappointment than an upside surprise.

GBP/USD positioning

The pound has been unable to capitalize on the weakness of the US dollar – exposing its weakness. Other currencies such as the euro have been able to hold onto their gains against the greenback despite its own issues. 

Sterling also looks vulnerable to recent political developments. The contest in the Conservative Party has kicked off with candidates competing to show who is tougher on Brexit – something that markets are not fond of. In addition, some insist that the EU may accept an accord without the thorny issue of the Irish backstop – also seemingly disconnected from reality.


Expectations for the UK jobs report seem too high after the weak GDP numbers. GBP/USD has exposed its vulnerability and may extend its falls on a disappointing outcome.

The UK jobs report is published on Tuesday, June 11th, at 8:30 GMT.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD rebounds after dismal US PMIs

EUR/USD is trading closer to 1.0850, rising in response to weak US PMIs, with the services one pointing to contraction. Earlier, German Manufacturing PMI beat estimates. 


GBP/USD advances to 1.2950 after US data

GBP/USD is trading around 1.2950, taking advantage of US weakness stemming from a downfall in Markit's Services PMI in the US. In Britain, the Manufacturing PMI exceeded estimates. 


Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Consolidation process underway

The Crypto board continues to be immersed in an emotional leg-breaking, consistently punishing the emotional state of the traders with its continuous changes of direction.

Read more

XAU/USD unstoppable, breaks to fresh 2020 highs, approaching $1650/oz

XAU/USD is trading in an uptrend above its main daily simple moving averages (SMAs) while breaking above a bull channel. Gold is printing fresh 2020 highs hitting $1646.64 per ounce on an intraday basis.  

Gold News

FXStreet launches Real-Time Trading Signals

FXStreet Signals offers access to explanatory live webinars, real-time notifications when signals are triggered and exclusive membership to the company’s Telegram group, where users get direct guidance by our analysts and get room to discuss and interact.

More info

Forex Majors