The British pound weakened against the dollar as traders awaited key UK economic data releases on jobs and GDP, which are expected to influence future Bank of England monetary policy. The Bank of England’s recent rate cut and divided MPC vote have created uncertainty surrounding the possibility of further easing this year.
- The British pound slipped to $1.341 from a two-week high of $1.345 on August 7.
- Traders are awaiting UK jobs and GDP data that could shape Bank of England policy expectations.
- The Bank of England lowered the Bank Rate by 25 bps to 4%.
- Four MPC members opposed the rate cut.
- The Bank of England signaled a potential slowdown in its easing pace due to sticky inflation.
- Markets are split on a December rate cut, with odds near 76%.
- Forecasts point to steady unemployment at 4.7%.
- Preliminary Q2 GDP is seen slowing sharply to 0.1% from 0.7% in Q1.
- Softer data could increase bets on another rate cut this year.
The British pound’s near-term direction hinges on upcoming economic indicators. Weaker-than-expected jobs or GDP figures could fuel speculation of additional monetary easing by the Bank of England, potentially putting downward pressure on the pound. Conversely, solid economic performance may temper expectations of further rate cuts, providing support for the currency. The conflicting signals from the central bank and the divided MPC further complicate the outlook, making the upcoming data even more critical for traders assessing the pound’s future trajectory.