Pound Weakens Against Dollar After Soft UK Employment Data
The British Pound (GBP) has weakened against the US Dollar (USD) by 0.1% to near 1.3530 during the European trading session on Tuesday.
This decline comes after the release of the UK employment data for three months ending June, which showed a cooling jobs market and limited impetus for the Bank of England (BoE) to hike rates this year.
Analysts at ING characterized the labour figures as 'nothing particularly earth-shattering', but still reinforcing a picture of a cooling jobs market. They noted that payrolled employment is down a touch, while cautioning that this headline masks big differences between government, consumer services, and the remaining private sector.
The unemployment rate is up a touch, though ING stressed that the Office for National Statistics has already flagged temporary sampling issues with the labour force survey underpinning it. Even allowing for those statistical caveats, ING concluded that the basic story remains the same, the jobs market remains cool, and wage pressures are fairly minimal.
This backdrop suggests little impetus for the 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, and will pay close attention to UK inflation to get fresh cues regarding the BoE's monetary policy outlook.