British pound hits two-month high, UK job data next

[Redator]

The British pound has started the new trading week in positive territory. In the European session, GBP/USD is trading at 1.3591, up 0.26% on the day. Earlier, the pound hit a daily high of 1.3620, its highest level since July 10.

UK claimant count change expected to jump

The UK releases employment data on Tuesday. Claimant counts is expected to jump to 20.3 thousand in August, after a rare decline in July which saw claimant counts decline by 6.2 thousand. The unemployment rate is expected to remain at 4.7% for a third straight time, its highest level in four years.

Wage growth including bonuses is expected to rise to 4.7%, up from 4.6% in the previous release, which was the lowest pace in nine months.

It's a busy week in the UK, with the inflation report on Wednesday and the Bank of England rate decision on Thursday. The BoE is expected to maintain rates at 4.0% after last month's narrow 5-4 decision to lower rates. Governor Bailey has said rates would move "downwards gradually over time" but hasn't provided any details as to the timing or extent of cuts.

The new danger - stagflation

The UK may have already entered stagflation, which is a toxic mix of persistently high inflation, weak growth and rising unemployment. This presents a major headache for the BoE, as weak growth supports a rate cut while high inflation could get worse if the BoE reduces rates.

The central bank is hesitant to lower rates with inflation close to 4%, but may have to cut before the end of the year if the labor market continues to deteriorate. Tuesday's job report is unlikely to change minds at the BoE, which is expected to hold rates. Still, it could be a factor in the November rate decision.

GBP/USD Technical

• GBPUSD has pushed above resistance at 1.3564 and is testing 1.3589 Above, there is resistance at 1.3605
• There is support at 1.3548

GBPUSD 1-Day September 15, 2025

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