UK interest rate cut likely in March as unemployment rate rises; youth joblessness to ‘increase significantly’ in coming months – as it happened

City traders expect cut to UK interest rates next month after jobless rate rises to 5.2%

• UK unemployment rate hits five-year high of 5.2% as wage growth cools

• Analysis: Gloom for UK workers as incomes flatline and jobs market falters

The pound is weakening, as traders anticipate the Bank of England could cut interest rates next month.

Sterling has fallen by two-thirds of a cent against the US dollar, to $1.355, its lowest rate since 6 February.

The market reaction has been swift. The pound has sunk on this news, GBP/USD is down by 70 points and it has lost the $1.36 handle. It is the weakest currency in the G10 FX space on Tuesday, and the pound is now trailing behind the dollar, and is the weakest currency in the G10 so far this month.

As the UK economy softens, the bias is to the downside for sterling.