• The Pound Sterling adds nominal gains against the US Dollar after the release of mixed UK labor market data.
• An expected decline in the UK wage growth would prompt BoE interest rate cut prospects for this month.
• Investors await the US inflation data for fresh guidance on the Fed interest rate cut path.

The Pound Sterling (GBP) trades slightly higher against its major peers in Tuesday’s London session after the release of the mixed United Kingdom (UK) Employment report for the three months ending in July. The British currency strengthens as the UK Office for National Statistics (ONS) reported a robust labor demand, while the wage growth eased broadly in line with expectations.

The agency reported that the ILO Unemployment Rate expectedly declined to 4.1% from the prior release of 4.2%. UK employers hired 265K new workers, significantly higher than the former release of 97K. Historically, robust job growth boosts hawkish Bank of England (BoE) bets. Still, it is less likely to be in this scenario as Average Earnings data, a wage growth measure that drives inflation in the service sector, has decelerated expectedly.

BoE policymakers have remained worried about persistent inflation due to high inflation in the services sector. A slowdown in the wage growth momentum would relieve them and boost market speculation for BoE interest rate cuts this month.

Average Earnings Excluding Bonuses came in at 5.1%, as expected, lower than the former release of 5.4%. The wage growth data, including bonuses, decelerated faster than expected to 4%, from estimates of 4.1% and the prior reading of 4.6%, upwardly revised from 4.5%.