Pound Sterling Slides vs Euro and Dollar after Weak UK Jobs Report

June 10, 2025 - Written by Tim Boyer

STORY LINK Pound Sterling Slides vs Euro and Dollar after Weak UK Jobs Report

Pound Sterling posted sharp losses against the Euro and U.S. Dollar after weaker-than-expected UK employment data.

The Pound to Euro exchange rate (GBP/EUR) slumped to 1-month lows at 1.1820 from 1.1875 ahead of the data. The Pound to Dollar exchange rate (GBP/USD) fell back 0.44 percent to trade at 1.34948.

The latest data triggered a glimmer of hope for traders expecting a surprise Bank of England rate cut at the June meeting and greater confidence of at least two further cuts by the end of 2025.

The Pound is being supported by high yields, but will, therefore, be under much greater threat if there is increased speculation that this yield support will be eroded at a faster rate.

According to ING; “This softer data comes at a time when sterling's relatively high yield is in demand. It could prove a reminder that the BoE is well behind the ECB in its easing cycle, and the policy spread may narrow some 100-125bp against sterling over the next 12-18 months.”

The bank notes significant near-term GBP/EUR support in the 1.1820-1.1840 band.

MUFG still sees potential Pound support; “The pound still retains its position as one of the highest yielders within G10 FX and has been supported by the pick-up in demand for carry trades in the near-term.”


The UK unemployment rate increased to 4.6% in the three months to April from 4.5% previously, in line with consensus forecasts and the strongest reading for close to four years.

According to the survey there was a provisional 109,000 employment decline in the year to May following a 55,000 decline for April with a 274,000 retreat in the 12-month period.

Excluding the Covid period, the May loss would be the sharpest decline since 2014, although the figure is liable to be revised higher.

Vacancies declined by a further 63,000 and have declined for 35 successive months.

ONS director of economic statistics Liz McKeown commented; “There continues to be weakening in the labour market, with the number of people on payroll falling notably. Feedback from our vacancies survey suggests some firms may be holding back from recruiting new workers or replacing people when they move on.”

Headline average earnings growth slowed to 5.3% in the year to April from a revised 5.6% previously and below market expectations of 5.5%.

Underlying earnings slowed to 5.2% from 5.5% and below expectations of 5.4%.


ING commented; “On the face of it, it is a fairly dovish UK jobs report this morning. Wages are down more than expected – private sector at 5.1% YoY. These were due to come lower anyway as a result of base effects, but this is a bigger drop.”

The British Retail Consortium (BRC) data recorded a 0.6% increase in like-for-like retail sales in the year to May following a 6.8% increase the previous month and compared with consensus forecasts of 2.7%.

BRC chief Helen Dickinson commented; “Consumers put the brakes on spending, with the slowest growth in 2025 so far.”

SocGen chief FX strategist Kit Juckes commented; "I think the economy is vulnerable. The economy will ultimately be sterling's Achilles heel because we have no room for fiscal policy, not much economic momentum. However, decent pay rises on average across the economy have helped.”

He added; "The UK economy is not growing, but there are people turning up in shops and bars because there's some wage growth. And so I think the world is full of sterling bears who are getting frustrated."

The key will be these bears can gain traction from the latest data setback.

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TAGS: Pound Euro Forecasts