Pound Sterling Rises vs Euro, Dollar on Firm UK Retail, Steady Jobs

Modified: Tuesday, 12 August 2025 10:00 BST - Written by James Fuller

STORY LINK Pound Sterling Rises vs Euro, Dollar on Firm UK Retail, Steady Jobs

Pound Sterling gained ground against the Euro and US Dollar on Tuesday, helped by a combination of steady retail activity and a stronger-than-expected set of labour market numbers. The move left the British Pound trading at 1.15879 against the Euro and 1.3461 against the US Dollar, both up 0.21 percent on the day.

The British currency was also firmer against the Australian dollar (+0.53%), New Zealand dollar (+0.44%), and the yen (+0.39%), while slipping slightly against the Swiss franc (-0.11%) and South African rand (-0.04%).

Barclays Research called the jobs figures “broadly positive,” noting that average weekly earnings grew by 4.6% in the three months to June, a touch below market forecasts, while employment rose by 238,000, comfortably ahead of the 185,000 expected.

“The unemployment rate held steady at 4.7%, and private earnings ex-bonus remained resilient at 4.8%,” the bank said. It added that the data “sits neatly with the Bank of England’s hawkish tone last week” and had prompted a small retreat in euro-pound, which dipped around 0.2% to 0.8640 as traders trimmed short positions.

On the retail side, Elliott Jordan-Doak at Pantheon Macroeconomics highlighted that July’s BRC survey still pointed to solid activity.

“Total sales values rose 2.5% year-over-year, with food sales outperforming non-food,” he said, adding that the broader picture of spending remains healthy despite a slowdown in like-for-like growth and a drop in footfall.

Lloyds Bank analysts observed that the moderation in pay growth and the emergence of labour market slack were largely tracking the Bank of England’s expectations.


“Employment is declining but at a less extreme pace than many surveys suggested might be the case,”
they noted, suggesting that inflation data is likely to carry more weight in near-term policy calls.

James Smith at ING said the relatively small fall in payrolls during July, just 8,000, might indicate that the worst of the downturn is now over.

“This tallies with business surveys which suggest hiring appetite has begun to improve after a torrid spring,”
he said, though he cautioned that vacancy numbers remain well below pre-pandemic levels.

The combination of steady consumer spending and a labour market that is cooling more gradually than feared gave sterling an extra lift in afternoon trade.

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