Daily Market View 14-10-2025

GBP-

Never hang your hat on UK employment data, it has too common a habit of letting you down. Naturally, I learned this lesson some time ago and so went into this mornings employment data release with great skepticism, even as KPMG jobs data over the weekend suggested a sunnier picture. 

Unemployment up 0.1% to 4.8%, its highest since May 2021 and wages, excluding bonuses, increase at their slowest rate since February 2022. 

All of this suggests that the British jobs market is either normalising from its post pandemic highs, or is in decline, which side you feel is a matter of opinion. What is not a matter of opinion is that it undoubtably raises the odds of an interest rate cut before the end of the year from the Bank of England. 

Especially in regards to wage growth, a factor that has seriously concerned the BoE over the past three years, with that now cooling to its slowest since '22, it makes it easier for the Bank to justify a cut in December. 

 

Whilst the market still firmly expects no change to interest rates by the Bank of England until the end of the year, chances have trickled upwards this morning. From a 19% chance of a cut in December to a 25% chance this morning, I will hold off on judgement until we get more jobs data, but certainly with more releases like this one, it's hard to see the BoE clinging to its current neutral stance on rates.

If that becomes so, should Bailey even hint at cuts on the table during his speech today, then the already poor GBP outlook becomes even worse and quick.

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