Forexpros - The number of people claiming unemployment benefits in the U.K. rose significantly more-than-expected in July, official data showed on Wednesday.
In a report, the U.K. Office for National Statistics said that the claimant count rose by a seasonally adjusted 37,100 in July, above expectations for an increase of 20,000.
The previous month's figure was revised up to 31,300 from a previously reported 24,500.
The rate of unemployment rose unexpectedly to 7.9% from 7.7%, confounding expectations for the rate to hold steady at 7.7%.
The report also said that the average earnings index rose more-than-expected, climbing by a seasonally adjusted 2.6%, above expectations for a 2.3% gain.
Following the release of the data, the pound extended losses against the U.S. dollar, with GBP/USD dropping 0.56% higher to trade at 1.6364.
Meanwhile, European stock markets were lower. The FTSE 100 sank 1.1%, the EURO STOXX 50 fell 1%, France's CAC 40 dipped 0.4%, while Germany's DAX tumbled 1.3%.