The MPC voted 7:2 to leave the rates unchanged as expected. They do say that there are signs of wage growth and that they are promising. Indeed, for October we have a better than expected wage growth rate of 1.4%. However, the unemployment rate stays at 6%. Claimant count change for November came out better than expected with a drop of 26.9K.
GBP/USD is ticking higher, slightly extending its gains. Was the good news leaked out?
The minority that voted for a rate hike reasoned their vote by saying there is a chance of a sharp rise in wages as slack is been eaten up quite quickly.
Wages are now left, right and center in the debate regarding rates.
The UK was expected to report a drop of around 20K jobless in November. The unemployment rate was predicted to tick down to 5.9% in October after 6% in September. The average earnings index was predicted to accelerate its advance to 1.3% in October from 1% beforehand. At the same time, the MPC Meeting Minutes for the recent meeting in November were released. A 7:2 split against raising the rates was expected to be maintained.
GBP/USD traded around 1.5715, bouncing back from a slide to lower ground.
The big event of the day is the Fed decision in the US. See the preview: FOMC quick preview: what’s more important: employment or inflation? Currencies to trade in both cases