Considering the current inflation levels and May’s GDP numbers, a weakening in the labor market may boost bets on a BoE policy move. The BoE kept interest rates at 4.25% in June, with six Monetary Policy Committee members voting in favor of leaving rates unchanged.
Nevertheless, concerns about services inflation could overshadow today’s data and the potential impact of a deteriorating labor market on the UK economy. The next CPI report could change the narrative, but the numbers are out until Wednesday, July 16.
GBP/USD Reaction to May’s GDP Report
Before the UK GDP Report, the GBP/USD briefly climbed to a high of $1.35848 before sliding to a low of $1.35439.
However, in response to the report, the GBP/USD tumbled from $1.35613 to a low of $1.35364, reflecting expectations of a more dovish BoE stance.
On Friday, July 11, the GBP/USD was down 0.20% to $1.35458.
