Economists expect two votes in favor of policy easing and seven to keep interest rates at 4% on Thursday, September 18. A higher-than-expected number of votes to cut rates on Thursday could raise expectations of a November policy adjustment. However, inflation and wage growth would need to fall sharply in September to green-light a policy adjustment.
ING Economics commented on the labor market data, stating:
“Private sector employment fell further in August, which should help take wage growth below 4% by year-end. That keeps the door open to further Bank of England easing, though our call for a November rate cut hangs in the balance.”
GBP/USD Choppy Post-Inflation Data
Ahead of the inflation report, the GBP/USD dropped to a low of $1.36369 before briefly climbing to a high of $1.36589. Following the inflation report, the pair briefly rose to $1.36526 before falling to a low of $1.36419.
On Wednesday, September 17, the GBP/USD was flat at $1.36456, reflecting uncertainty about the BoE’s policy outlook through the fourth quarter.
