Busy Morning for GBP
It’s a busy morning of data and events this morning in the UK, with labour market data as well as the Bank of England’s Inflation Report and subsequent press conference from Mark Carney.
Expectations are for a further decline in UK unemployment. Consensus expectations are for a decline to 6.8 percent. However, the employment components of recent surveys suggest that we may see a more significant drop in the unemployment rate. This could be very positive for GBP.
The Quarterly Inflation report will likely see an upward revision in GDP forecasts, but with less upside than previous revisions. It is unlikely that we will see anything earth shattering in the report, and Mark Carney is unlikely to change to a more hawkish tone in the press conference.
Some short sterling activity yesterday suggested that the markets knew something about the QIR before its release, and suggests that the report will strike a cautiously dovish tone, despite the consistent improvements in the UK economy.
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