GBP Trades Mixed on UK Data, Eyes BoE Decision

The British Pound (GBP) reacted unevenly to the release of the UK's labor market data for three months ending July. The Office for National Statistics (ONS) reported a net gain of 67,000 jobs, lower than the previous quarter's 83,000.

While the unemployment rate remained steady at 4.9%, as expected, average earnings excluding bonuses rose by 3.5% Year-on-Year (YoY), meeting forecasts. The wage growth measure including bonuses grew in line with estimates of 3.9%, slower than the previous reading of 4.2%, revised higher from 4.1%. The mixed results have investors looking ahead to Wednesday's UK Consumer Price Index (CPI) data and Thursday's Bank of England (BoE) interest rate decision.

Strategists at Brown Brothers Harriman anticipate the BoE will keep the policy rate at 3.75% for a sixth straight meeting, with another 6-3 vote expected. They note that easing UK wage growth and services inflation give the BoE room to stand pat, which incoming data should reinforce.