| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 06:00 | United Kingdom | Claimant count | July | 36.2 | 14.5 | 135.0 |
| 06:00 | United Kingdom | ILO Unemployment Rate | June | 4.4% | 4.5% | 4.2% |
| 06:00 | United Kingdom | Average Earnings, 3m/y | June | 5.7% | 4.6% | 4.5% |
| 09:00 | Eurozone | ZEW Economic Sentiment | August | 43.7 | 35.4 | 17.9 |
| 09:00 | Germany | ZEW Survey - Economic Sentiment | August | 41.8 | 32.6 | 19.2 |
GBP rose against other major currencies in the European session on Monday as investors digested the UK employment report.
The Office for National Statistics (ONS) reported that employment in the UK surged by 97,000, the most since last November and much above economists’ forecast of 3,000. Meanwhile, the unemployment rate dropped to 4.2% from 4.4% in the three months to May, surprising economists who had predicted 4.5%.
In addition, the report revealed that regular pay growth in Britain slowed from 5.8% YoY to 5.4% YoY, the lowest level since August 2022. Economists had expected a 4.6% YoY gain.
Markets interpreted the latest UK labour market data as a sign of underlying strength in the British economy and a supportive of their bets on additional one or two rate cuts from the BoE this year. According to Bloomberg, markets now fully price in one more rate decrease by the end of 2024 and see a 63% probability of the second move.
Later in the week, investors will receive the UK’s CPI data for July and the preliminary GDP growth estimate for the second quarter. Economists expect to see an acceleration in the annual inflation rate from 2.0% in June to 2.3% in July, which would represent the first rebound in the headline CPI this year, a slowdown in the annual core inflation rate from 3.5% in June to 3.4%, which would be the lowest level since October 2021, and a 1.0% YoY growth in the economy in the second quarter, which would mark the strongest expansion since the third quarter of 2022.