Skip to content 
by The British pound remained mostly unchanged, hovering around $1.305 (GBP/USD) as traders analyzed the latest economic data and future monetary policy decisions.
GBPUSD Fundamental Analysis – 12-September-2024
GDP Growth Falls Short of Expectations
In July, the UK economy didn’t show any growth, marking the second month in a row of stagnation. Experts had predicted a 0.2% increase, but that didn’t materialize. Adding to the concern, industrial production dropped by 0.8%, which caught many off guard as this was not anticipated.
Slowing Wage Growth Poses a Concern
Wage growth in the UK has slowed significantly, reaching 5.1%, the lowest in almost two years. This includes private sector wages, which the Bank of England closely monitors. They have also fallen to 4.9%, levels last seen in 2022.
Job Market Sees Positive Developments
On a brighter note, the unemployment rate dropped slightly to 4.1%, and the economy created 265,000 jobs. This job growth far exceeded predictions, relieving the otherwise sluggish economy.
Investors Look to Future Rate Cuts
Although the Bank of England reduced interest rates in August, they are cautiously approaching future cuts. Investors expect another rate cut in November, and there’s also talk of a possible additional reduction in December.
Conclusion
The British economy presents a mixed picture. While challenges include slowing wage growth and stalled GDP, the labor market shows resilience with falling unemployment and strong job creation.
As investors await potential rate cuts in the coming months, the future direction of the pound and the economy remains uncertain.
About The Author
