Unemployment in the UK fell to 4.4% in the three months to June from 4.5% recorded in the previous month, better than expectations for stability at the same rate as the previous month. Bringing it to the lowest level over 42 years.
Employment levels rose by 125K during the three months to June and by 338K throughout the year, with employment rising to a record high of 75.1% from a previous reading of 74.9%. Also, the change in claimant count fell by about 4,200 in July, while the June reading was revised to 3.500 from 5.200.
The annual rate of income remained strong, rising by 2.1% compared to the previous revised reading to 1.9%, while the rate of income excluding bonuses rose by 2.1% compared to the previous reading, which rose by 2%.
All labor market data came in stronger than expected, leading to some improvement in the confidence surrounding the UK economy's outlook of raising interest rates, but the need to sustain of strength of this data will continue to support expectations for a rate hike this year.
The Bank of England's expectations for interest rate hikes over the past few weeks have been reduced, and inflation figures have fallen short of expectations, reinforcing that there will be no rate hike this year. Following today's data, the pound rose nearly 50 pips from its lowest level since July at 1.2840 to reach 1.29 levels before retreating to currently trade at 1.2870.