The British Pound (GBP) drifts further from Monday\u2019s highs near 1.3450 against the US Dollar (USD) on Tuesday, reaching session lows a few pips above 1.3400 at the time of writing. UK unemployment figures confirmed that the labour market deteriorated in March, adding negative pressure on the Sterling.<\/p>\n
Data released by the UK Office for National Statistics on Tuesday revealed that the Unemployment Rate rose to 5% in the three months to March, against market expectations of a steady 4.9%. National Statistics also reported a 26.5K increase in jobless benefit claimants in April, from 4.9K in March.<\/p>\n
Beyond that, Average Earnings Including Bonus accelerated to a 4.1% yearly rate in the three months to March from 3.9% in the previous month, increasing inflationary pressures in the UK economy and complicating the Bank of England\u2019s (BoE) monetary policy-setting activity.\u00a0<\/p>\n
The uncertain political scenario in the UK remains another source of pressure for the British Pound<\/a>, with Prime Minister Keir Starmer fighting for survival after the Labour Party\u2019s defeat in the local elections. Great Manchester mayor Andy Burnham, the best-positioned candidate to replace him,\u00a0has been easing investors’ concerns about fiscal slippage, assuring his commitment to abide by the government\u2019s borrowing limits.<\/p>\n In the US, the calendar<\/a> is thin during the first half of the week, but growing hopes of a peace deal in Iran have pushed Oil prices and US yields down from recent highs, which is weighing on the safe-haven US Dollar. US President Trump said on Monday that he paused an attack amid advances on a nuclear deal, which keeps hopes of a swift end to the war alive.<\/p>\n (This story was corrected on May 19 at 06:40 GMT to say that the GBP reached highs near 1.3450 on Monday, and not 1.3440, and that the Unemployment Rate covers the three months to March and not last month, as previously stated.)<\/p>\n Economic Indicator<\/p>\n ILO Unemployment Rate (3M)<\/p>\n The ILO Unemployment Rate released by the UK Office for National Statistics<\/a> 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.<\/p>\n <\/p>\n Read more. Economic Indicator<\/p>\n Claimant Count Change<\/p>\n The Claimant Count Change released by the UK Office for National Statistics<\/a> 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.<\/p>\n
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