Daily Market View 17-02-2026
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Pound plummets following woeful employment data
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Assume the worst going into UK jobs figures and you'll look clairvoyant more times than not. The fact that the jobless rate increased for the 7th reading in the last 9 should illustrate that the UK is in an extended period of job losses and moderating wage growth.
Moreover, with unemployment now at its highest since December of 2020, the height of the pandemic, the question becomes: when will this stop?
Tax data also suggested that the economy as a whole lost a further 11,000 jobs in December, brining the overall jobs loss figure in 2025 to 134,000. Nevertheless, the single silver lining may be that the Bank of England will feel more comfortable cutting rates in March, especially given the decision came down to a single vote last time around.
The rapid fall in wage growth will likely have as big an impact on the MPC as the rise in unemployment. Wage growth was seen as the phantom that kept the overall inflation level elevated and was seen as a major trouble area for the BoE, now that private sector pay growth is crawling along at 3.4%, its weakest since 2020, its unsurprising why traders are now fully pricing in two BoE cuts this year.
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