Pound falls as dismal Employment data boosts BoE rate cut Predictions.
The Pound Sterling (GBP) fell to the round level support of 1.2800 in Tuesday’s European session. After the United Kingdom Office for National Statistics (ONS) announced Disappointing Employment statistics. According to data from the UK ONS, Increased interest rates from the Bank of England (BoE). And a Worsening cost of living problem are beginning to impair labor market conditions.
The UK employment numbers for the three months ending January show sluggish labor demand and slower wage increases.
The UK’s unemployment rate jumped to 3.9%, Companies sacked 21K workers. And average earnings grew at a slower pace.
pace over the three months ending in January. The labor market data clearly shows uncertainty about the economic outlook. Which may lead BoE policymakers to begin lowering interest rates earlier than expected.
Investors divert their attention to US inflation data and UK monthly GDP.
Investors could expect strong volatility today. As the United States Bureau of Labor Statistics (BLS) releases the February Consumer Price Index (CPI) data. The inflation figures will provide new insights into the US interest rate forecast.
Daily Market movers: Pound Sterling falls due to weakening UK labor market conditions.
The pound sterling falls substantially after the United Kingdom ONS announced weaker-than-expected employment figures for the three months ending in January.
The unemployment rate increased to 3.9%, exceeding estimates and the previous reading of 3.8%. Employers in the UK laid In the three months ending in December, 21K workers were laid off, while 72K new employees were hired. In February, the Claimant Count Change increased moderately by 16.8K, compared to forecasts of 20.3. Individuals collecting unemployment benefits totaled 3.1K in January, down from 14.1K the previous month.
Average Earnings Excluding Bonuses increased by 6.1%, compared to expectations and the prior reading of 6.2%. Earnings, including bonuses, increased at a slower pace of 5.6%, compared to the consensus of 5.7% and the previous reading of 5.8%.
The rate of reduction in Average Earnings (both with and without incentives) for the three months ending January is faster than market participants predicted. Slower wage growth is expected to allow Bank of England policymakers to consider rate decreases earlier than previously planned.
In contrast, on Monday, BoE policymaker Catherine Mann warned that there is a long way to go until inflation falls to the desired objective of 2%. Mann was one of two policymakers who voted for a rate increase at the February monetary policy meeting.
Investors divert their attention to US inflation data and UK monthly GDP.
This week, the Pound Sterling will continue in action as investors focus on the UK monthly Gross Domestic Product (GDP). And January industrial statistics, which will be released on Wednesday.
The GBPUSD pair is expected to continue volatile as the US inflation data. Announced at 12:30 GMT, will determine the next move in the US Dollar.
Monthly headline inflation is expected to have increased to 0.4% from 0.3% in January. In the same period core inflation. Which strips away Volatile food and energy costs are expected to have climbed at a lesser rate of 0.3% compared to the previous figure of 0.4%. In terms of yearly numbers. Economists predict that the headline CPI will remain stable at 3.1%. While core inflation will fall to 3.7% from 3.9% in January.
