policymakers are expected to face pressure from a stubborn inflation outlook due to strong wage growth and a bleak labor market outlook due to higher interest rates.
The Unemployment Rate for the quarter ending to July rose to 4.3% as anticipated by market participants from the prior reading of 4.2%. Average Earnings excluding bonuses in the three months to July landed at 7.8%, in line with estimates and the former release. Wage growth data including bonuses rose to 8.5% against projections and the former release of 8.2%.
The BoE is widely expected to raise interest rates on September 21 by 25 basis points to 5.50% while investors will keenly watch guidance for the rest of the year. The market sentiment remains quiet as investors await the United States Consumer Price Index data for August, which will be published on Wednesday at 12:30 GMT.
A power-pack action is anticipated in the USD Index after the release of the inflation data. According to estimates, headline inflation is expected to grow at a higher pace of 0.5% in August on month against the 0.2% pace recorded for July. Core CPI is seen steady at 0.2%. The reacceleration in headline inflation is driven by a strong rebound in gasoline prices.
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