GBP/USD edges higher on USD weakness – BBH
|Pound Sterling (GBP) gained modestly against the dollar but underperformed the euro as stagnant productivity, soft labor demand, and sticky wage growth underscore the UK’s stagflation risk, BBH FX analysts report.
Sterling lags euro amid soft UK labor backdrop
"GBP/USD edged higher on broad US Dollar (USD) weakness. Pound Sterling (GBP) is underperforming against EUR. The UK July labor market data matched consensus."
"The unemployment rate was unchanged for a third straight month at a four-year of 4.7% in July (BOE Q3 projection: 4.8%). Worrisomely, the vacancies-to-unemployment ratio (0.43) points to a soft labor market, with the ratio still under the BOE’s threshold equilibrium (0.53)."
"Meanwhile, UK wage growth remains a key source of underlying inflation pressure given that labor productivity is estimated at 0% in 2025. The policy-relevant private sector regular pay printed at 4.7% y/y in July (BOE Q3 projection: 4.8%) vs. 4.8% in June. Bottom line: the UK economy is skirting with stagflation which can further undermine GBP vs. EUR."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.