BoE December Rate Hike Still Not a Certainty
The UK's 3-month moving average of average earnings (compared with the same period last year) came in at 5.8%. This was higher than the consensus of 5.5%. The unemployment rate declined to 4.3%, also under the consensus forecast of 4.4%. The inflation numbers will be released tomorrow, and Friday will see retail sales.
During yesterday's Monetary Policy Report Hearings, the BoE governor, Andrew Bailey, told MPs that he is "very uneasy" about inflation in the UK. The market currently regards the GBPUSD as weak; it is in the lower blue band/lower red band area (chart below). If, after the two scheduled data points, it remains so, it would suggest to us that a December hike is still not a fait accompli.
Governor Baily suggested as much, maintaining that he wants to assess the impact of ending the furlough scheme on unemployment before hiking rates. This infers that the next job data release is pivotal to the rate hike decision, despite the inflation and retail data scheduled for this week.
Past performance is not an indicator of future results
Source: www.tradingview.com
Russell Shor
Senior Market Strategist
Russell Shor is a Senior Market Strategist at FXCM, having been promoted to the role in 2025 in recognition of his depth of insight and consistent delivery of high-impact market analysis. He originally joined FXCM in October 2017 as a Senior Market Specialist.
Russell holds an Honours Degree in Economics from the University of South Africa, is a certified FMVA®, and a full member of the Society of Technical Analysts (UK). With over 20 years of experience in financial markets, his work is renowned for its clarity, precision, and strategic value across asset classes.
Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.