GBP

Sterling appreciated this morning as wage data in the UK grew more than expected, placing further pressure on the Bank of England to hike interest rates further next month. The data released by the Office for National Statistics, showed earnings grew at their fastest pace outside of the Covid pandemic period at 6.7% in the year to December, above the previous year and expectations of 6.5%.

The unemployment rate remained unchanged at 3.7%. The data is indicative of a tight labour market and is something the BoE will be looking to avoid in an attempt to bring inflation back to its 2% target. With this in mind, it is likely that further rate hikes are required.

Key announcements

07:00 – GBP – Average Earnings excluding bonus (Dec) 6.7% above expectations of 6.5%

07:00 – GBP – Unemployment rate actual 3.7% expectations 3.7%

10:00 – EUR – Gross Domestic Product (QoQ)(Q4) expected 0.1%

10:00 – EUR – Gross Domestic Product (YoY) (Q4) expected 1.9%

13:30 – USD – Inflation excl food and energy (MoM) (Jan) expected 0.4%

13:30 – USD – Inflation excl food and energy (YoY) (Jan) expected 5.5%