British Pound trades mixed after steady UK employment report, CPI data eyed

• The British Pound trades mixed after the release of the steady UK labor market report for three months ending July.
• Investors keenly await the UK CPI and the BoE’s policy decision.
• The Fed is almost certain to raise interest rates on Wednesday.

The British Pound (GBP) reflects a mixed performance against its currency peers after the release of the United Kingdom (UK) labor market data for three months ending July.

The Office for National Statistics (ONS) reported that the economy created 67K fresh jobs, lower than 83K in three months ending June. The ILO Unemployment Rate remained steady at 4.9%, while it was expected to increase to 5%.

Average Earnings Excluding Bonuses, a key measure of wage growth, rose steadily by 3.5% Year-on-Year (YoY), as expected. The wage growth measure Including Bonuses also grew in line with estimates of 3.9%, slower than the previous reading of 4.2%, revised higher from 4.1%.

Meanwhile, investors await the UK Consumer Price Index (CPI) data for August, and the Bank of England’s (BoE) interest rate decision, which are scheduled for Wednesday and Thursday, respectively.

The US CPI report is expected to show that the headline inflation accelerated to 3.1% Year-on-Year (YoY) from 2.9% in July. In the same period, the core CPI – which excludes the volatile components of food, energy, alcohol and tobacco – grew at a faster pace of 2.7% against the previous reading of 2.6%.

BoE seen on hold as softer UK data give room to pause

Strategists at Brown Brothers Harriman note that the Bank of England is “widely expected to keep the policy rate at 3.75% for a sixth straight meeting” at Thursday’s decision. They anticipate “another 6-3 vote,” with Megan Greene, Catherine L Mann and Huw Pill “backing a 25bps hike,” even as the majority opts to stay on hold. In their view, “easing UK wage growth and services inflation give the BoE room to stand pat,” a dynamic that should be underscored by incoming data, as “the UK July labor market data (Tuesday) and August CPI (Wednesday) are expected to reinforce that trend.”

Against the US Dollar, the Pound Sterling is down 0.17% to near 1.3478. The GBP/USD pair trades lower as the US Dollar outperforms ahead of the Federal Reserve’s (Fed) monetary policy announcement on Wednesday.

Economists at ING explain that they have "changed our view to a 25bp Federal Reserve rate hike in September in the wake of Chair Kevin Warsh’s address at the Jackson Hole symposium," adding that "the data since then has justified that decision

GBP/USD Technical Analysis

In the daily chart, GBP/USD trades at 1.3477, sitting right on a previously rising trend-line pivot while remaining capped by the 20-day exponential moving average (EMA) at 1.3524 overhead. This keeps the near-term tone mildly bearish, as price trades below its short-term EMA and struggles to sustain the prior uptrend structure, while the Relative Strength Index (RSI) near 43 suggests fading bullish momentum rather than an oversold condition.

On the topside, initial resistance is aligned at the 20-day EMA around 1.3524, and a close above this barrier would be needed to ease the current downside bias and open the way to a deeper recovery. On the downside, the immediate pivot support is clustered around the broken trend-line area at 1.3477, with more substantial structural backing only emerging towards the trendline’s origin near 1.3137, where buyers would be expected to defend the broader bullish structure.

(The technical analysis of this story was written with the help of an AI tool. Know more.)