Cable Rallies on Strong Wage Data, BoE Minutes Point to Impending Rate Hike

gbp-061715

Sterling rallied on stronger than expected wage data, with UK average household income surging to new cycle highs. The data coincides with BoE Carney’s remark in the central bank’s annual report this week that the margin of slack in the economy has narrowed. Cable has so far gained over 80 pips in the wake of the data release, making one-month highs above 1.5749. Markets will be bringing forward BoE tightening expectations to earlier in 2016. Cable’s May-14 peak at 1.5815, which is the highest level seen since last November, looks likely to be challenged.

The UK average household income data much stronger than expected, surging to new cycle highs of +2.7% year over year in the three months to April in both the including- and excluding-bonus figures. That’s a leap from +1.9% year over year in the including-bonus measure and up from +2.2% year over year in the ex-bonus number. The median forecasts had been for respective rises of +2.1% and +2.5%. The income data offset a weaker than expected 6.5k drop in the May claimant count. Both the May claimant count rate and the April unemployment rate remained unchanged at 2.3% and 5.5%, respectively, both of which are cycle lows, and both as expected. Sterling rallied as news of the wage rise hit the wires.

The June BoE MPC minutes confirmed there was a unanimous votes to keep the repo rate at 0.5% and the QE total at GBP 375 billion, as anticipated. This suggests that all nine MPC members are now seeing that the next move in interest rates would be a hike. Haldane had previously been thought to see that a rate cut was as likely as a rate hike. The minutes stated that the committee agreed that the path for UK monetary policy would depend on the prospects for inflation in the United Kingdom and would not be determined by the actions of other central banks. The minutes also said the strength of the headwinds to growth had begun to ease.

The post Cable Rallies on Strong Wage Data, BoE Minutes Point to Impending Rate Hike appeared first on Forex Circles.

Source:: Cable Rallies on Strong Wage Data, BoE Minutes Point to Impending Rate Hike

About the Author
ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC. Our mission is to maximize the value our clients derive from their most precious commodity, "Time"! By offering advanced and innovative services, optimal customer care and perpetual devotion to our clients, we will ensure that their individual needs are always met as markets continue to evolve over time. Visit ForexTime to learn more www.forextime.com [space height="20"] [social type="facebook"]https://www.facebook.com/ForexTime[/social] [social type="twitter"]https://twitter.com/ItsForexTime[/social] [social type="google-plus"]https://plus.google.com/u/0/+ForextimeFXTM/posts[/social] [social type="youtube"]https://www.youtube.com/user/ItsForexTime[/social]

Related Posts

Leave a Reply

*