The UK unemployment rate just plunged. It fell from 7.4% to 7.1%. It was only expected to fall to 7.3%.
The pound is surging on the news, as traders wonder whether the BOE will be pressured to begin the tightening cycle. The Bank of England has said that a 7.0% unemployment rate is the level at which it would review its rates policy.
This is not dissimilar to the situation in the US, where a plunging unemployment rate is seen as putting more and more pressure on the Fed to act.
Here’s a chart of the British Pound.