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The UK’s Claimant Count Change (or jobless claims) rose by 6.9K in January Early expectations stood on a rise of 3.2K.

The unemployment rate for December remained at 8.4%, as expected. GBP/USD ticks down. It continues the downtrend trading.

Last month’s jobless claims were revised from +1.2K to 1.9K. The  Average Earnings Index for December rose at a pace of 2%, higher than 1.8% that was expected.

GBP/USD is gradually sliding in the past week. After crossing 1.59, it made choppy moves downwards. It already reached a trough at around 1.5640 before jumping up. The pair was under 1.57 prior to this release.

Inflation is falling in the UK. CPI reached an annual level of 3.6%, as expected. Other inflation indicators fell below expectations.

Later in the day, the BOE will release its quarterly inflation report. It will likely point to further drops in inflation. The release will be accompanied with a press conference by BOE governor Mervyn King.

This justifies the decision by the Bank of England to expand the QE program to 325 billion pounds: unemployment continues rising and inflation is dropping.

For more on the pound, see the GBP/USD forecast.