UK Jobs Report Lifts GBP but Impact Minimal on Chances of Rate Rise
GBP news and talking points:
- Today’s UK employment report shows continuing strength in the UK labor market.
- However, more robust data will be needed if the Bank of England is to increase interest rates soon, so the impact on GBPUSD has been negligible.
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UK employment increases sharply
The latest UK employment report suggests that the jobs market remains buoyant. However, more strong figures will be needed over the next few months if the Bank of England is to increase interest rates. GBP rose modestly on the news but longer-term the impact is likely to be meager.
GBPUSD Price Chart, Five-Minute Timeframe (May15, 2018)
Employment in the UK in March rose by a robust 197,000 – well above both the 130,000 expected and the previous 55,000. However, that was offset by figures showing that claimant-count unemployment rose by 31,200 in April, above the projected 7,800 and an upwardly revised 15,700 the month before.
Meanwhile, wages rose in line with expectations, with average weekly earnings up 2.6% and the figure ex-bonuses up 2.9%.
Over the last few weeks it has become clear that a UK interest rate increase over the next few months has become less likely and these latest jobs data are unlikely to change that perception. There is therefore likely to be little long-term impact on the Pound.
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--- Written by Martin Essex, Analyst and Editor
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.