The UK releases two important data sets this week. Economists at ING analyze GBP outlook ahead of employment and prices figures.
Services inflation to surprise on the downside and dent expectations for a further 50 bps tightening
Tuesday’s jobs data release should continue to show average gains at 7%+ year over year. Sterling could face further problems with July CPI data on Wednesday. Here, we expect services inflation to surprise to the downside and dampen expectations of a further 50 bps tightening from the Bank of England.
GBP/USD risks coming down to the 1.2590/2610 area today on the back of the stronger Dollar.
