Disappointing UK data: the average wage growth slowed down to 1.8%, significantly lower than 2.2% expected. Also when including bonuses, earnings rose only 1.6%, short of 1.8% that was on the cards. The unemployment rate also fell short of predictions: 5.7%. Jobless Claimant Count Change came in within expectations at a drop of 31K. The MPC voted unanimously to maintain the current historically low interest rate at 0.50% at 9:0.
GBP/USD falls below 1.47. The new bottom is 1.4680. Update: cable continues even lower.
Also against the euro, GBP is on the back foot, with EUR/GBP above 0.72.
At the time of the meeting, the pound was relatively stronger and this was mentioned in the minutes: they said that a stronger sterling could prolong the below target inflation expectations. The members led by Mark Carney say that divergent monetary policy could put upwards pressure on GBP.
Regarding wage growth, they say that it is growing slightly faster than forecast. Well, they did not have the most recent data.
The previous jobless claims numbers were revised to a drop of 39.4K from 38.6K originally reported.
The UK was expected to report a fall of around 30K jobless claims in February, somewhat lower than -38.6K seen in January (before revisions). The unemployment rate for January was predicted to drop to 5.6% from 5.7% in December. Average hourly earning carried expectations for ticking up from 2.1% to 2.2%. At the same time, the MPC meeting minutes were released.
GBP/USD was on the back foot towards the release, trading just under 1.4750.
More: GBP/USD Breakout: Levels & Targets – BofA, Goldman
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