Pound is expected to fall further.

The Pound (GBP) maintains its five day losing streak. As investors expect the UK economy to enter a recession as a result of weaken labor market conditions. And a weak demand forecast. The GBPUSD pair is projected to lose additional ground as the Bank of England (BoE) pauses its rate cycle. Raising consumer inflation expectations.

Bank of England’s abrupt policy stop reveals a bleak economic picture.

The Bank of England’s unexpected halt in its usually aggressive rate cycle has not only underlined. Policy makers’ anxiety about the UK’s economic up heaval. But it has also exposed the Bank’s own concerns. Has also sparked concerns about the inflation prospects.

Britain’s energy costs have been boosted by the global oil boom. And inflation is expected to rise again. A combination high inflation. And weak labor demand might lead to stagflation.

Daily Market Movers: The Pound Sterling is feeling the effects of the Bank of England’s rate cycle halt.

Pound is facing the wrath of a risk off market sentiment. As investors remain concerned about the global economy as the dangers of increased interest rates intensify.

The market remains uneasy as investors perceive the global economy struggling to absorb the implication of central bankers’ tight monetary policies.

The effects of increasing interest rates on the UK economy are having an effect on labor market conditions and economic activity.

Employers in the UK lay off Workers have been laid off in the last two months. As companies have moved their attention to cost containment as the demand situation has deteriorated.

Though labor demand has decreased, pay growth has remained high enough to keep inflation at bay.

The UK Services PMI, like the contracting UK Manufacturing PMI. Fell below the 50.0 mark for the second week in a row. This shows that increased inflation and a rebound in gasoline prices are squeezing families’ actual income.

Despite solid wage growth and a low consumer inflation forecast, the Bank of England opted to stop policy tightening last week. This suggests that policymakers at the Bank of England are more concerned about the potential for economic upheaval than they are about sustained inflation.

The Pound Sterling is being sold by investors as a result of Expectations that the Bank of England has finished raising interest rates. In contrast, the US Dollar has stayed robust during a break in the Federal Reserve’s (Fed) policy tightening cycle.

Falling inflation and robust economic prospects have caused the Fed to suspend its tightening. Labor demand is strong in the US economy, consumer spending is strong, and wage growth is consistent.

Investors are looking for more information from the UK’s Q2 GDP figures.

Investors will pay close attention to the UK’s April-June quarter Gross Domestic Product (GDP) data. Which will be released on Friday. Quarterly and annual GDP numbers are expected to grow at a consistent rate of 0.2% and 0.4%.

The US Dollar Index (DXY) is trading around a new 10-month high of 106.30, as Fed officials favor more policy tightening to guarantee price stability.

As the US economy perform well in compared to the other G7 nations, inflation pressure beyond the intended rate of 2% will not disappear quickly. This has force Fed members to retain a hawkish perspective on interest rates.

Investors will be watching the US Durable Goods Orders for August, which will be issued at 12:30 GMT on Wednesday. Orders are expected to fall at a softer 0.4% rate in August, compared to a 5.2% drop in July.