UK Jobs Data Recovers Slightly
UK unemployment data continued the decline, revealing an additional 20.4k persons claiming unemployment benefits in contrast to consensus expectations of 2.3k. The unemployment rate for August measured 4.2%, a slight drop from estimates and the prior print of 4.3%.
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The UK has experienced a notable easing in the job market – one of the telling signs that restrictive monetary policy is having an effect on the real economy. Central banks are broadly in agreement that a period of below trend growth and easing in the job market is required to bring inflation back towards target. The slight turn lower will not force the Bank of England to seek higher interest rates as inflation has broadly been heading lower and effects of higher rates are being felt across the board.
UK and EU PMI is up next, with previous prints failing to inspire. Germany and the UK both received lower revisions to their respective growth outlooks from the IMF in its latest World Economic Outlook, underscoring the difficulties that lie ahead.
Immediate Market Response
GBP/USD saw a slight lift after the release, helped somewhat by a weaker USD after US yields declines yesterday.
GBP/USD 5- minute chart
Source: TradingView, prepared by Richard Snow
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— Written by Richard Snow for DailyFX.com
Contact and follow Richard on Twitter: @RichardSnowFX
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