British Pound Declines to $1.34 Ahead of Job, GDP Data
The British pound slipped to $1.341 from a two-week high of $1.345 on August 7 as traders await UK jobs and GDP data that could shape Bank of England policy expectations after last Thursday’s narrow vote to cut rates.
The Bank of England lowered the rate by 25 bps to 4%, with four MPC members opposing, and signaled a potential slowdown in its once-a-quarter easing pace due to sticky inflation. Markets are split on a December cut, placing the odds near 76%.
Forecasts point to steady unemployment at 4.7%, while preliminary GDP is seen slowing sharply to 0.1% in Q2 from 0.7% in Q1. Softer data could boost bets on another cut this year.
On trade, the 90-day US–China tariff truce expires Tuesday, with an extension expected. Geopolitically, US President Trump and Russia’s Vladimir Putin will meet Friday in Alaska in an effort to broker a Ukraine peace deal.
BoE delivered a hawkish cut last week, with the first voting round failing to produce a majority. It was the first time ever the BoE had to conduct two voting rounds to reach a majority.
Moreover, inflation forecasts were revised upwards, and the statement leaned on the more hawkish side with these two lines: “upside risks around medium-term inflationary pressures have moved slightly higher” and “the restrictiveness of monetary policy has fallen.”
The central bank is finally acknowledging that inflation should be their biggest concern given that the UK still has one of the highest inflation rates among the major countries.
In fact, core inflation has never fallen below 3% since 2021. Couple that with high wage growth and a central bank that is cutting rates and the outlook gets very tricky for the BoE. #British Pound Declines to $1.34 Ahead of Job, GDP Data 21 Companies in Trillion Naira Valuation Club on NGX
