UK Payroll Employment Falls as Unemployment Holds at 4.9%

UK labor market data showed further softening and is likely mildly negative for GBP sentiment. Payroll employment fell by 13,000 in July, matching a revised June drop, and payrolled jobs were 94,000 lower than a year earlier (-0.3%). The ILO unemployment rate stayed at 4.9%, slightly above expectations, while the claimant count unexpectedly fell by 11,000. Wage growth was mixed: regular pay edged up to 3.5% y/y, but total earnings slowed to 4.1% and median payroll pay eased to 4.2% y/y. The release suggests employment is weakening faster than wages, keeping pressure on the Bank of England but not dramatically changing the rates outlook. For markets, the data can weigh on sterling via slower labor demand, though relatively firm wage growth limits the downside.