UK Employment Data Improved, Pound Reply Defeat

UK Employment Data Improved, Pound Reply DefeatThe pound retaliated against the US dollar in Wednesday's trading session (12 / July) this afternoon, away from a two-week low that was touched after the British jobs data report. The unemployment rate of countries that are in the process of Brexit is declining, but the growth of salaries still lags behind the inflation rate.
GBP / USD is trading at the price of 1.2859 when this news is written, removing the loss at 1.2812 which was reached shortly after the data was released. EUR / GBP is in the range of 0.8915 from the previous in the number 0.8925. While GBP / JPY shifts up its position, from 145.54 to 145.76.

The UK Bureau of Statistics (ONS) reported, the Unemployment Rate dropped to a 4.5 percent level in the three months through May, forming new lows in 42 years. The number of people out of employment declined by 64,000 in the three months to May, still according to the same report.

Unfortunately, wage growth data is not in line with the inflation rate. This has further heightened concerns over pressure in the standard of living of Britons amid rising inflation in Brexit uncertainty.

The average income index, including bonuses, rose 1.8 percent in seasonally adjusted for the three months through May. This calculation is in line with the forecast, but below the previous month's gain of 2.1 percent. The pressure in Real Wages continued after the UK reached 2.9 percent inflation in May.

If bonuses are not included in the calculation, the UK Wage Growth reached 2.0 percent in the three months to May, compared with expectations of 1.9 percent gain.

Post Broadbent Statement
Sterling was depressed in the previous session due to a statement from BoE Deputy Governor Ben Broadbent. In an interview with the Scottish newspaper, Broadbent warned that although there is a reason to raise the BoE rate, it should be remembered that there are so many harmful consequences caused by it.

Responding to the statement, Sterling was shrunk to the same level as when Trump won the US Presidential Election last November. According to Lee Hardman, London MUFG analyst interviewed by Reuters, for anyone who expects a BoE rate hike in August, it is clear that it is impossible to do, even though the BoE still stressed that they are on track to raise.

From here, expectations of higher interest rate increases next year. Moreover, other comments from BoE officials such as Andy Haldane, still show support for interest rates. This is what sustains the Pound from the fall, amid the political uncertainty of England.