GBP Falls as Soft UK Employment Data Weighs on Rate Hike Bets

The British Pound (GBP) fell by 0.1% against the US Dollar (USD) during Tuesday's European trading session, reaching near 1.3530. This decline comes after the release of the UK employment data for three months ending June.

Analysts at ING characterized the latest UK labour figures as offering 'nothing particularly earth-shattering,' but still reinforcing a picture of a cooling jobs market. They noted that payrolled employment is down slightly, while cautioning that this headline masks big differences between government, consumer services, and the remaining private sector.

ING pointed out that the unemployment rate is up a touch, although they stressed that the Office for National Statistics has already flagged temporary sampling issues with the labour force survey. Even allowing for these statistical caveats, ING concluded that 'the basic story is the same, the jobs market remains cool, and wage pressures are fairly minimal.'

This backdrop suggests little impetus for the Bank of England (BoE) to hike rates this year. Investors will focus on the UK Consumer Price Index (CPI) data for July, which will be released on Wednesday, as a key indicator for the BoE's monetary policy outlook.