United Kingdom: Stagnation with stabilisation signs – Deutsche Bank

Deutsche Bank's Chief UK Economist, Sanjay Raja, highlights that the United Kingdom's economy has surpassed forecasts, but the labor market is stagnant. The jobless rate remains unchanged at 4.9%, and the number of payrolled employees decreased by 13,000. Private sector pay growth has slowed to 2.8% (year-over-year). However, there are tentative signs of stabilization in the labor market.

Job vacancies have decreased slightly to 707,000, and the vacancy-to-unemployment ratio has remained stable at 0.4. Redundancies have also slowed to 106,000, the lowest level since July 2025. The claimant count dropped from 4.4% to 4.3%. Labour market flows suggest momentum is building, with underemployment dropping to 8% and job churn rising to 2.4%.

Additionally, the quits rate increased for the first time since spring. Despite these positive signs, the Monetary Policy Committee (MPC) is likely to remain inactive before key inflation data. The British Pound has experienced a decline due to weak labor data. Gold dipped slightly, and the US Dollar gained strength. Cryptocurrencies like Ripple and Stellar face pressure due to market uncertainty and weak technical momentum.