UK unemployment rate lower than expected in July but pay growth cools

The UK jobless rate was steady in the three months to July, defying expectations of an increase, according to numbers from the Office for National Statistics on Tuesday.

The UK unemployment rate remained at 4.9% in the three months to July, where it stood in three month stretch to June. According to consensus cited by FXStreet, it had been expected to rise to 5%.

According to the ONS, payrolled employees in the UK fell by 101,000 on-year in July, declining 19,000 from June.

An early estimate for August showed payrolled employees were 145,000 lower year-on-year and down by 26,000 from July.

Over the three month period, average total earnings growth was 3.9%, cooling from 4.2% in the three months to June, but in line with FXStreet cited consensus. Excluding bonuses, earnings growth was 3.5%, also in line with consensus, and steady from June.

Looking at the private sector alone, a figure closely tracked by the Bank of England, total pay growth abated to 3.2% in the period to July from 3.7% in the stretch to June. Excluding bonuses, private sector wage growth was steady at 2.9%.

On Wednesday, there is a consumer price index report published at 0700, the final piece of the puzzle before a Bank of England decision on Thursday. According to consensus cited by FXStreet, the rate of inflation is expected to have accelerated to 3.1% in August from 2.9% in July.

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