GBP/JPY edges lower as slowing UK wage growth adds to BoE pause case

Having rebounded from a two-month low, the GBP/JPY currency pair edged lower on Tuesday, after data showed UK wage growth had decelerated further in the three months to October, while adding to the case of a rate pause by the Bank of England at its upcoming policy meeting.

Average weekly earnings, including bonuses, rose 7.2% year-on-year to GBP 663 per week in the three months to October, compared with market expectations of a 7.4% growth.

Though the lowest since May, UK wage growth still remained elevated.

In the latest period, pay growth was the highest in the private sector, 7.2%, while public sector wages increased at a much slower rate than before, 7.1% year-on-year.

Regular pay, excluding bonuses, rose 7.3% year-on-year to GBP 620 per week in the three months to October, slowing from a 7.8% rise in the preceding period and also below market consensus of a 7.4% growth.

UK’s adjusted experimental unemployment rate was reported at 4.2% in the three months leading up to October, or unchanged compared to the July to September period.

UK’s adjusted employment rate remained steady at 75.7% during the period, while the economic inactivity rate was also unchanged at 20.9%.

Meanwhile, investors now look to the outcome of the Bank of England’s December meeting. The BoE is largely expected to keep its benchmark interest rate at a 15-year high of 5.25% for a third straight meeting amid signs of an economic slowdown.

As of 8:32 GMT on Tuesday GBP/JPY was edging down 0.35% to trade at 182.811. Last week, the minor Forex pair went down as low as 178.534. The latter has been the pair’s weakest level since October 3rd (178.031).