Sterling dipped against the dollar on Monday, as weak pay figures from recruiters added to signs of a slowdown in Britain’s job market.
The pound was last down 0.1% versus the dollar at $1.2626, while it was broadly flat against the euro at 85.77 pence per euro.
Starting salaries for permanent staff grew at the slowest rate in over three years in March, recruiters said, while spending on temporary workers fell by the most since July 2020.
The data from the Recruitment and Employment Confederation (REC) may help convince Bank of England policymakers that underlying pay pressures in the economy are easing sufficiently to keep inflation at its 2% target.
However, the BoE has been reluctant to put too much weight on REC data in recent months.
“This morning’s REC report on jobs points to a further slowdown in the labour market in March, and is likely to fuel renewed calls for the BoE to deliver rate cuts next month,” analysts at Monex Europe said in a note.
“That said, we are more circumspect in our view of the data, and we suspect the (Bank of England’s Monetary Policy Committee) will exercise a degree of caution too.”
Traders put just a 25% chance on the Bank of England cutting rates at its next meeting on May 9, according to futures markets data.
(Reporting by Iain Withers; Editing by Emelia Sithole-Matarise)
