KEY UK JOBS DATA POINTS:
UK Employment Change (FEB) 182k Actual vs 160k Forecast.UK unemployment rate (MAR) 3.9% actual vs 3.8% expected.Average earnings incl. Bonus (3 months/year) (MAR) 5.8% actual vs forecast 5.8%.In real terms (adjusted by inflation) Wages were down 3% for full pay and 2.0% for regular pay.To know more Price action, Graphics patterns i moving averagesTake a look at DailyFX Education Section.
Trade Smarter – Sign up for the DailyFX newsletter
Receive timely and compelling market feedback from the DailyFX team
Subscribe to the newsletter
READ MORE: Australian dollar falls on soft China data. Will there be AUD/USD test lows?
The latest UK labor market data was mixed as we had both signs of resilience and early signs of collaboration as the number of people working in the UK grew by 182,000 (3 month period to end of March 23) above the forecast. figure of 160k. The increase was largely driven by part-time workers and the self-employed.
Customize and filter live economic data using our DailyFX Economic Calendar
The unemployment rate rose 0.1% in the quarter to 3.9%, largely attributable to people out of work for more than 12 months. This is the highest level since the period November 2021 to January 2022. From February to April 2023, the estimated number of vacancies fell by 55,000 in the quarter to 1,083,000. Vacancies fell during the quarter for the tenth consecutive period and reflect uncertainty across industries as respondents continued to cite economic pressures as a factor in slowing hiring. The ONS report went further by stating that the UK lost 556,000 working days due to strikes in March.
Average earnings incl. The bonus in the UK came in at 5.8% and in line with estimates. Meanwhile, the average growth of the public sector was 5.6% between January and March 2023, this growth of the public sector was last seen between August and October 2003 (5.7%).
Source: National Statistics Office
UK PROSPECTS FORWARD
Looking, we’ve had a lot of high-impact data from the UK over the last two weeks that have painted quite a mixed picture of the economy. Inflation remains uncomfortably high, while the BoE’s recently revised growth forecasts have seen some upward revisions. However, this week’s GDP growth data showed an intriguing slowdown and contraction in GDP growth in February and March, respectively.
There’s no denying that the UK economy has largely remained resilient, but recent GDP data may be cause for concern. Lately we’ve seen retail sales also fall, a sign that consumers are continuing to tighten their belts as the cost of living remains an issue. I for one will be keeping a close eye on the GDP data as it starts to trickle out in the second quarter and of course UK inflation.
The Bank of England (BoE) left the door open to further increases in interest rates. Another hike is possible, but given the banks’ inflation expectations, it might be time to wait and see. As the effects of the recent hiking cycle begin to take hold, central banks will want to ensure that excessive tightening does not prevail worldwide with the BoE being no exception.
Recommended by Zain Vawda
Get your free GBP forecast
MARKET REACTION
Initial market reaction to the news has seen GBPUSD drop around 50 pips, which is surprising given the recovery we saw yesterday. The strength of the slide data release was also helped by a slightly stronger USD this morning.
However, the GBPUSD on a daily time frame is attempting to break below the ascending channel, which could open a deeper pullback towards the support areas provided by the 50- and 100-day MAs at 1.2380 and 1.2260 respectively . Keep a close eye on developments in the US debt ceiling as this could have a significant impact on the USD and therefore the GBPUSD.
GBPUSD Daily Chart, May 16, 2023
Source: TradingView, by Zain Vawda
— Written by Zain Vawda for DailyFX.com
Contact and follow Zain on Twitter: @is over
element within element. Surely this is not what you wanted to do! Instead, you load your application’s JavaScript package inside the element.
Source link
