UK Unemployment Unexpectedly Falls to 4.7%, Bolstering BoE Rate Hike Expectations
| Pair | Now | Since publish |
|---|---|---|
| GBPUSD | — | — |
| EURGBP | — | — |
- UK unemployment unexpectedly fell to 4.7% in August.
- Payrolls increased, but wage growth was mixed.
- Data strengthens Bank of England rate hike expectations.
The UK unemployment rate unexpectedly declined to 4.7% in the three months to August 2026, down from 4.9% and surprising economists who had forecast a rise to 5.0% or stability. This improvement was supported by an increase in payrolled employees, with September data showing a 13,000 rise and private sector payrolls growing for the first time since January. Wage growth presented a mixed picture, as average weekly earnings including bonuses rose 3.7% year-on-year, slightly below expectations, while ex-bonus growth matched or slightly exceeded forecasts at 3.7%. Despite some reports indicating a decline in job vacancies, the overall jobs report has reinforced market sentiment for a potential Bank of England interest rate hike, possibly as soon as November.