UK Unemployment Rate drops to 4.2% in quarter to June vs. 4.5% expected

• The UK Unemployment Rate unexpectedly fell to 4.2% in three months to June.
• The Claimant Count Change for Britain arrived at 135K in July.
• GBP/USD jumps to test 1.2800 after mixed UK employment data.

The United Kingdom’s (UK) ILO Unemployment Rate dropped to 4.2% in the three months to June after recording 4.4% in the previous period, the data published by the Office for National Statistics (ONS) showed on Tuesday. The market expectation was for a 4.5% print.

Additional details of the report showed that the number of people claiming jobless benefits increased by 135K in July, compared with a revised gain of 32.3K in June, coming in below the expected 14.5K figure by a wide margin.

The Employment Change data for July arrived at 24K, as against June’s 16K.

Meanwhile, Average Earnings excluding Bonus in the UK rose 5.4% 3M YoY in June versus a 5.7% growth seen in May. The reading matched the expectations of a 4.6% acceleration.

Another measure of wage inflation, Average Earnings including Bonus also increased by 4.5%  in the same period, having risen by 5.7% quarter through May.

GBP/USD reaction to the UK employment report

GBP/USD picked up fresh bids in a knee-jerk reaction to the mixed UK employment data. The pair is trading 0.24% higher on the day at 1.2795, as of writing.