Sterling scaled up on Tuesday despite data showing Britain's jobs boom is ending, as the employment report was overshadowed by weakness in the dollar ahead of an update on United States inflation that could herald a softer stance from the Federal Reserve. 

 The pound, which has been pummelling in recent months by a torrent of negative news about Britain's ailing economy, persistent inflation, and intensifying oil crises, received some relief from the dollar's reluctance.

Despite appearing to be a positive sign, official data released on Tuesday showed that the UK's unemployment rate had fallen to its lowest level since 1974. In reality, this was due to the workforce contracting as the economy deteriorated. 

According to the Office for National Statistics, the proportion of the population that is neither employed nor seeking for work has increased due to an increase in the number of long-term unwell persons and a lower-than-average rate of student employment.

The report came after one on Monday that revealed Britain's economy expanded even less slowly than forecast in July as demand was restrained by the significant rise in energy prices. By putting a cap on residential energy tariffs, the new prime minister Liz Truss has attempted to address the issue head-on, but at a cost of up to an additional 100 billion pounds (USD 117.21 billion) to Britain's already overstretched public coffers.

Despite this, the pound increased 0.2 percent on Tuesday morning to reach USD 1.1709, surpassing its most recent low of USD 1.14 set last week, as the dollar declined ahead of U.S. inflation data that was scheduled to be released at 1230 GMT. If the report confirms expectations that inflation has peaked, the Federal Reserve may start to decrease the rate of interest rate increases, which would put weight on the dollar's recent gains against other major currencies.

In the meantime, the pound dipped to 86.8 pence per euro, maintaining above its Monday low of 87.215 pence, the currency's lowest level versus the euro since 2021. USD  1 equals 0.8532 pounds.

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