GBP/JPY holds above 199.00 as UK employment data beats expectations
- The Pound holds gains after a six-day rally, supported by better-than-expected UK employment figures.
- UK unemployment claims dropped against expectations, and net employment fell less than forecasted.
- These figures give further reasons for the BoE to wait for some time before cutting interest rates again.
The Pound remains near year-to-date highs, consolidating gains, after rallying for six consecutive days. An unexpected decline in jobless claimants in July has given a fresh boost to the British Pound on Tuesday.
Data released by the UK Office for National Statistics revealed that the Unemployment rate remained steady at 4.7% in the three months to July, as expected, while net employment declined less than expected, and jobless claims also fell.
The number of requests for unemployment benefits fell by 6,200 in July, while the June initial estimate of a 25,900 increase was revised to a 15,500 decline. The market had forecasted another increase of around 20,800 in July.
Furthermore, net employment fell by 8,000, well below the 20,000 decline expected and following a 41,000 drop in June. Wages have grown at their lowest pace in almost a year, 4.6% in the three months to June, from 5% in the previous period.
These figures justify the strong opposition to cutting interest rates seen in the BoE monetary policy committee last week, and strengthen the case for steady interest rates during the rest of the year.
The Japanese Yen, on the other hand, is struggling after dovish remarks from Bank of Japan policymakers last week. The BoJ remains committed to continuing to tighten its monetary policy, but recent concerns about trade uncertainty and the impact of US tariffs are likely to deter the bank from hiking rates in the near term.
(This story was corrected on August 12 at 07:22 GMT to highlight that June's number of requests for unemployment benefits, or Claimant Count Change, was revised to a decline of 15,500.)
Economic Indicator
ILO Unemployment Rate (3M)
The ILO Unemployment Rate released by the UK Office for National Statistics is the number of unemployed workers divided by the total civilian labor force. It is a leading indicator for the UK Economy. If the rate goes up, it indicates a lack of expansion within the UK labor market. As a result, a rise leads to a weakening of the UK economy. Generally, a decrease of the figure is seen as bullish for the Pound Sterling (GBP), while an increase is seen as bearish.
Read more.Last release: Tue Aug 12, 2025 06:00
Frequency: Monthly
Actual: 4.7%
Consensus: 4.7%
Previous: 4.7%
Source: Office for National Statistics
The Unemployment Rate is the broadest indicator of Britain’s labor market. The figure is highlighted by the broad media, beyond the financial sector, giving the publication a more significant impact despite its late publication. It is released around six weeks after the month ends. While the Bank of England is tasked with maintaining price stability, there is a substantial inverse correlation between unemployment and inflation. A higher than expected figure tends to be GBP-bearish.
Economic Indicator
Claimant Count Change
The Claimant Count Change released by the UK Office for National Statistics presents the change in the number of unemployed people in the UK claiming benefits. There is a tendency for the metric to influence GBP volatility. Usually, a rise in the indicator has negative implications for consumer spending and economic growth. Generally, a high reading is seen as bearish for the Pound Sterling (GBP), while a low reading is seen as bullish.
Read more.Last release: Tue Aug 12, 2025 06:00
Frequency: Monthly
Actual: -6.2K
Consensus: 20.8K
Previous: 25.9K
Source: Office for National Statistics
The change in the number of those claiming jobless benefits is an early gauge of the UK’s labor market. The figures are released for the previous month, contrary to the Unemployment Rate, which is for the prior one. This release is scheduled around the middle of the month. An increase in applications is a sign of a worsening economic situation and implies looser monetary policy, while a decrease indicates improving conditions. A higher-than-expected outcome tends to be GBP-bearish.
Office
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
