UK Labour Data Improves Again

The British Pound is back in favour this week following a bumper set of labour market indicators this morning. UK wages were seen rising by 7% over the three months ending in March, marking their fastest pace of growth since summer 2021. Alongside this, the unemployment rate was seen falling back to its lowest level since 1974 at 3.7%, marking a decline from the prior month’s 3.8% reading.

With the labour market continuing to tighten and wages continuing to rise, the backdrop for inflation remains incredibly fertile. With this in mind, BOE rate hike expectations remain firmly planted. The BOE has recently warned over the longer-run impact of its tightening policy, forecasting a slowdown later in the year. However, in the face of such data, there is little to suggest the BOE will deviate from its near-term plan of continuing to hike rates.

Technical Views


GBPUSD is turning higher off the latest test of the bear channel support. With price finding demand on approach to the 1.2022 level, the market is now attempting to get back above the 1.2426 level. With both MACD and RSI turning bullish, the focus is on a continuation higher while above this level with 1.2626 and the channel top, the next resistance area to note.