The pound dipped slightly on Thursday but is still on track for a fourth weekly gain against the dollar. UK data indicated that the Bank of England (BoE) may have limited scope to cut rates at its August meeting. Average weekly earnings excluding bonuses grew by 5.7% in the three months to the end of May, aligning with forecasts.
Sterling was 0.1% lower at $1.2995, after reaching a session high of $1.30125. Economic growth is also on the rise, with British GDP increasing by 0.4% in May.
Futures markets now see a 40% chance of a rate cut at the BoE’s August meeting. The pound crossed the $1.30 mark for the first time since last July and is up 2.1% this year, making it 2024’s best-performing major currency.
Hetal Mehta from St. James’s Place noted that the slight decline in wage growth is welcome news for the BoE, balancing their decision-making process.