The Pound Sterling moved higher against the US Dollar, which is still under heavy pressure as a result of geopolitical risk. The latest labor market data from the UK has also helped to support the Pound, with wage growth slightly beating analysts’ expectations with a 2.3% reading for average wages including bonus against 2.2% expectations. The average wages excluding bonus was 2.2% against a consensus call of 2.1%. Investors use wage growth as a measure of the health and strength of the British economy, important especially now as it prepares to withdraw from the European Union.
As reported at 10:57 am (BST) in London, the GBP/USD was trading at $1.2498, up 0.08%; the pair had earlier hit a session peak at $1.2518 before easing back while the trough for the session was set at $1.2481. The EUR/GBP was down 0.06% to trade at 0.8485 Pence; the pair’s range in the session was from the low of 0.8481 Pence to the high of 0.8505 Pence.
Analysts Outlook Dim for Pound
Yesterday’s release of UK inflation data showed a reading of 2.3%, maintaining its position above the 2% target set by the Bank of England. That has helped to quell some speculation that the UK central bank might need to adjust interest rates at this time. The fact that today’s wage growth figures were slightly better than expected has temporarily taken the wind out of the sails of those analysts predicting the continual erosion of consumers’ purchasing power. Analysts say that there is a risk for stagflation to weigh on the Pound Sterling which could dampen its appeal as an investment.