The British Pound has experienced a notable rise against both the Euro and the Dollar following unexpected wage growth in the UK. As of December 17, 2024, the GBP/EUR exchange rate climbed to 1.2080, reflecting a positive market reaction to the latest employment data. Regular UK pay rose to 5.2% in October, up from 4.9%, exceeding analysts' expectations. Additionally, wages including bonuses also increased by 5.2%, surpassing the estimated 4.6% growth. This surge in wage growth has contributed to a rally in the GBP/USD exchange rate, which reached 1.2692.
Despite the positive wage data, the unemployment rate remained unchanged at 4.3%, and there was a 3.7% decline in job vacancies over the three months leading to November. Furthermore, the number of payrolled employees fell by 35,000 month-on-month in November, indicating a cooling labor market. Analysts suggest that businesses may adopt more constrained hiring practices due to anticipated payroll tax increases.
Looking ahead, the Bank of England is set to make its next policy decision on Thursday, with inflation expected to rise to 3.0%. Goldman Sachs has forecasted ongoing resilience for the GBP/EUR exchange rate, suggesting that the Pound may continue to strengthen in the face of these economic indicators. The recent developments in wage growth and employment data are likely to play a significant role in shaping market expectations and currency valuations in the coming weeks. [2564e248] [ce8c6a87] [d2aa91b8] [bda65162] [69a60ca3] [4197f0d1] [07552254] [75d9064c] [34665567] [cbd74863]