The UK Office for National Statistics will release its labour market report at 07:00 GMT. Analysts expect the ILO Unemployment Rate to rise to 5.1% in October, up from 5.0% in September. Additionally, Employment Change for September was -22,000. For November, the Claimant Count Change is predicted to increase by 22,300, reflecting the rise in people claiming jobless benefits. Average Earnings, including bonuses, are expected to grow by 4.4% over the three months leading up to October, a decrease from the previous rate of 4.8%.

GBP and USD Trading

GBP/USD is seeing losses ahead of the UK labour market data as traders remain cautious before the release of key US economic information. A better-than-expected report could boost the Pound, which faces resistance levels at 1.3400 and 1.3438. If it falls, support could be found at 1.3330. The ILO Unemployment Rate is an important economic indicator. An increase may weaken the UK economy and the Pound, while a decrease can strengthen the currency. Labour market conditions significantly impact currency values, economic growth, and inflation. High employment generally boosts consumer spending and can enhance currency value. Wage growth also affects inflation and monetary policy. Central banks closely monitor employment levels when shaping their policies, highlighting its importance in assessing economic health. The UK labour market data will be released today, and the consensus suggests a potentially weakening trend. Unemployment is expected to rise to 5.1%, and wage growth is likely to slow slightly. This release is crucial as it could influence the Bank of England’s future interest rate decisions.

Bank of England’s Rate Decisions

This data is especially vital now because the Bank of England held its main interest rate at 4.5% in its November 2025 meeting, citing wage pressures as a significant concern. With the latest inflation figure at 3.1%, a weaker jobs and wages report today might lead traders to expect earlier rate cuts by mid-2026. Therefore, any deviation from expectations could lead to sharp movements in the Pound. It’s important to note that the expected unemployment levels represent a significant increase from the sub-4% rates observed in 2022 and 2023. This gradual rise reflects the effects of the BoE’s period of higher interest rates. If unemployment exceeds the 5.1% forecast, it would suggest the economic slowdown is accelerating. With negative expectations already factored in, derivative traders should prepare for further declines in GBP/USD. If the data aligns with or deviates from forecasts, we could see movements around the 100-day moving average near 1.3330. Strategies like buying put options could be effective if the currency heads towards the 1.3287 support level. However, we must also be ready for any upside surprises, especially if wage growth exceeds expectations. This could undermine the idea of a cooling economy and trigger a quick reversal of short positions. In this case, GBP/USD could rapidly approach the 1.3400 resistance, making short-term call options a plausible strategy. It’s also important to consider the US side of this currency pair, as significant US data is due for release later today. The US labour market has shown more strength, with the last Nonfarm Payrolls report for November 2025 indicating a solid job market that supports a strong dollar. A weak UK report today, followed by strong US results, could put significant downward pressure on GBP/USD in the upcoming weeks. Create your live VT Markets account and start trading now.

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