UK Unemployment Falls Surprise to 4.9%, Wage Growth Slows to Lowest Since 2020

Latest UK labor data paints a mixed picture with unemployment unexpectedly dropping to 4.9% in February versus 5.2% consensus, supporting sterling short-term. However, regular pay growth ex-bonus eased to 3.6% y/y—the weakest since November 2020—alongside softer employment change of +25k (vs +35k expected), March payrolls down -11k, and payrolled employees declining 74k y/y. Initial reports noted wage beats like average weekly earnings at +3.8% (3m/yr) vs +3.6% forecast, but cooling momentum tempers GBP gains versus USD, leaving Great British Pound vs US Dollar range-bound with downside risks from reduced inflation pressure.