Pound found temporary support as UK economic growth was flat in the third quarter, contrary to projections of a decrease.

The Pound Sterling (GBP) gains some confidence. As the UK economy avoids a decrease in economic activity in the third quarter. The GBPUSD attempts to recover on momentary optimism. But growth estimates are pessimistic, as enterprises’ capacity expansion investments in the last quarter were much lower. Due to weak demand from domestic and international markets.

Policymakers at the Bank of England (BoE): Huw Pill and Katherine Mann are concerned about the consequences of higher interest rates in the fight. Against sticky inflation and are expected to support quicker rate cuts as recession fears grow. The Pound Sterling’s future direction will be determined by UK labor market data. Which will be released on Tuesday at 07:00 GMT. Investors would keep an eye on hiring and salary growth statistics.

Daily Market Movers: The Pound Sterling is waiting for important UK data.

The pound sterling is consolidating in a narrow range above 1.2200. As investors anticipate the release of UK employment and inflation statistics on Tuesday and Wednesday, respectively.

The GBPUSD pair finds intermediate support near 1.2200. As the UK economy avoids a fall in the third quarter. Instead, it will remain stagnant until the fourth quarter of 2023.

Preliminary Total Business Investment fell by 4.2% in the third quarter. Exceeding estimates of a 3.5% drop. Firms’ long-term spending increased by 4.1% in the second quarter.

This has cast a shadow on Q4 GDP, as weaker business investment reflects firms’ lack of confidence in overall demand from both domestic and global players.

The outlook for the UK economy is bleak, as the cost-of-living problem has worsened as a result of the Bank of England raising borrowing prices. Softening labor market conditions, and ongoing price pressures.

Monthly Industrial Production in the United Kingdom stayed unchanged.

Monthly Industrial Production in the United Kingdom stayed unchanged in September, while Manufacturing Production rose at a 0.1% slower rate than expected. Of 0.3%.

According to the most recent predictions, the economy will be sluggish for the next two years, with only 0.1% growth in 2026.

Last week, Bank of England Chief Economist Huw Pill warned that raising interest rates for a long enough period of time to moderate inflationary pressures could result in an unsustainable downturn in the economy.

Higher interest rate pressures may compel the Bank of England to consider reducing rates sooner than predicted. Pill stated that he expects rate decreases in mid-2024 while discussing rate cuts.

Higher borrowing costs have made investing in the housing sector less affordable. According to the UK property website Rightmove, asking prices for homes have dropped at the fastest rate in five years. Reuters reported on the time of year.

Pound Sterling next move will be dictated by the labor statistics.

The Pound Sterling’s next move will be dictated by the labor statistics, which is due on Tuesday.

According to consensus, the unemployment rate will remain at 4.2% in the three months ending September. The October Claimant Count Change increased by 15K, which was lower than the September reading of 20.4K.

Aside from employment figures, investors will be looking closely at salary data for the July-September quarter, which has been a big contributor to the UK economy’s stubborn inflation. Estimated average earnings excluding bonuses fell to 7.7% from 7.8% previously. The pay statistics, including bonuses, fell substantially to 7.4% from 8.1% previously.

Meanwhile, global tensions remain high as Israeli Prime Minister Benjamin NetanyahuNetanyahu has rejected cease-fire talks unless they involve the release of all Hamas hostages.

Despite Federal Reserve (Fed) Chair Jerome Powell’s statement that current interest rates are insufficient to manage price pressures, the US Dollar Index (DXY) is under pressure near 106.00.

Investors are looking for more information from the UK employment and inflation reports.

Investors are looking forward to the release of October US inflation statistics on Tuesday. The US price index data will provide clues for the Fed to take additional monetary policy action.