The British pound weakened to $1.31 after weaker-than-expected labor market data strengthened expectations of a Bank of England interest rate cut next month. Regular pay growth slowed to 4.6% in the third quarter, the weakest since February–April 2022, while total pay, including bonuses, rose 4.8%, slightly below forecasts of 4.9%. Meanwhile, the unemployment rate climbed to a four-year high of 5.0%, exceeding expectations of 4.9%, as the number of unemployed people increased and employment fell for the first time since early 2024. The Bank of England kept interest rates unchanged last week but signaled that a rate cut in December remains possible as policymakers assess how persistent domestic inflation pressures may be.
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