The UK’s unemployment rate decreased against expectations in June, while earnings growth slowed, data published by the Office for National Statistics showed Tuesday.

The unemployment rate for the April-to-June period eased to 4.2% from 4.4% for March to May.

This outperformed the FXStreet-cited market consensus, which had expected an increase to 4.5%.

The Bank of England had forecast the unemployment rate to remain at 4.4%.

Pepperstone market analyst Michael Brown said: ‘My base case of a quarterly pace of [UK interest rate] cuts from here on in remains, with the Monetary Policy Committee next likely to deliver a 25 [basis point] cut - potentially via a split decision once more - at the November meeting, in conjunction with an updated round of economic forecasts.’

Annual growth in employees’ average regular earnings, excluding bonuses, stood at 5.4% in the April to June period, a slowdown from 5.7% for March to May.

Including bonuses, annual pay growth decelerated to 4.5% from 5.7%. ‘However, this total growth rate is affected by comparing with a period including June 2023, when the NHS one-off bonuses were paid,’ the ONS cautioned.

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