The pound fell to a three-month low after data on Tuesday showed regular wage growth slowed and unemployment rose, and currencies came under pressure from a rising dollar. increase after Donald Trump’s victory in the American election.
Sterling fell 0.5% to $1.2806, its lowest level since August 15, in early European trade. It was last down 0.44% at $1.2814.
The pound also fell against the euro, with the single currency rising 0.2% to 82.97 pence.
Data on Tuesday showed that UK wage growth, excluding bonuses, fell in the third quarter to its lowest level in more than two years. In September, the unemployment rate rose from 4.1% to 4.3%, although low survey response rates have reduced the reliability of UK employment figures.
“The fall in regular wages in the private sector suggests that the Bank of England will continue to gradually cut interest rates,” said Paul Dales, chief UK economist at consultancy Capital Economics.
“There is little to suggest the Bank should be concerned that labor market softening and slowing underlying wage growth are coming to an end.
However, the pound was already down 0.3% before the data was released, as the dollar continued its strong rise in the wake of the November 5 US election.
President-elect Trump has proposed imposing tariffs of 10 to 20 percent on all imports and potentially taxing Chinese goods as high as 60 percent, moves that investors say would harm the states’ European trading partners. -United.
The pound has lost about 1.1% since the election, but it has fared better than the euro, which has fallen about 2.8%. Britain voted to leave the EU in 2016 and 2020, and only recorded a small trade surplus with the United States in mid-2024.
The euro fell to a two-and-a-half year low against the pound on Monday as investors braced for potentially painful trade measures.
Mr. Trump’s cabinet is taking shape, and one of the names in the running for the top trade post is Robert Lighthizer, a prominent advocate of tough tariffs.
The dollar index, which measures the currency against six other currencies, was up 0.29% at 105.73 on Tuesday. It’s up about 2% since the election.
