GBP/USD drops below 1.3050 after weak UK employment data release

GBP/USD declined 0.6% to 1.3040 following disappointing UK labour market data that increased Bank of England rate cut expectations. UK unemployment rate rose to 4.3% in September from 4.1%, exceeding forecasts of 4.2%, while average earnings growth slowed to 4.8% year-over-year from 5.1%. The weaker employment figures suggest the UK economy is cooling faster than anticipated, potentially allowing the BoE more room to ease monetary policy. Sterling fell against all major currencies, with EUR/GBP climbing 0.4% to 0.8410. Technical analysis shows GBP/USD breaking below the key 1.3050 support level, opening the path toward 1.3000 psychological support. The 50-day moving average at 1.3120 now acts as resistance. Markets have increased odds of a November BoE rate cut to 75%, which could pressure sterling further if upcoming inflation data also disappoints.