Considering the current inflation level and the GDP number of May, a weakening in the labor market can promote bet on a BOE policy move. BOE kept interest rates at 4.25% in June, six monetary policy committee members voted in favor of leaving the rates unchanged.
Nevertheless, concern about the inflation of services may see the potential impact of a deteriorating labor market on today’s data and the UK economy. The next CPI report can change the story, but the numbers are out until Wednesday 16 July.
GBP/USD response for May GDP report
Before the UK GDP report, GBP/USD climbed a high of $ 1.35848 before slipping at a low of $ 1.35439.
However, in response to the report, GBP/USD fell from $ 1.35613 to a low of $ 1.35364, reflecting the expectations of a more Dovish Boe Rukh.
On Friday, July 11, GBP/USD was below 0.20% to $ 1.35458.
