Sterling firmed in early European trade, pushing EUR/GBP back towards its year-to-date low of 0.8393 while GBP/USD moved above 1.3350. The move followed UK labour market data showing payrolled employment rising by 13k in September, alongside stronger pay dynamics that align with the Bank of England’s latest projections.
Outlook For Monetary Policy
Market pricing already reflects expectations of monetary tightening, with almost three rate rises priced in by March next year and speculation focused on a potential increase as soon as next month, followed by another early next year.
Labour Data And Currency Range
The labour report also showed private sector wage growth at 3.0% year on year, matching the BoE’s forecast; it marked the first increase since 20024, with attention turning to the 2027 pay settlement period. Against that backdrop, EUR/GBP was described as attempting to shift into a lower 0.8200 to 0.8400 range last seen between September 2024 and April 2025, while fiscal plans in the upcoming Budget remain a factor for confidence in consolidation.
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