The EUR/GBP pair discovers buying interest rates after correcting to near the round-level support of 0.8700 in the European session. The cross recovers swiftly as investors hope that the Bank of England (BoE) will keep interest rates unchanged at 5.25% for the second time in a row. The UK factory data remained weak in September as firms cut heavily on laborforce and inventory due to a weak demand outlook. In the same period, consumer spending contracted by almost 1% as higher borrowing costs squeezed households’ pockets. The absence of strength in the UK economic data would allow the BoE to deliver an unchanged interest rate decision in the monetary policy meeting on November 2. Meanwhile, BoE Governor Andrew Bailey remains confident that inflation will come down in October.
Going forward, UK Employment data will be keenly watched, which will be published on Tuesday at 06:00 GMT. According to the consensus, UK employers shed 198K jobs in the quarter to August. In the same period to July, the UK laborforce was squeezed by 207K. A slowdown in the labor demand would also allow BoE policymakers to remain neutral on the interest rates. The Unemployment Rate in the quarter to August is seen unchanged at 4.3%. The Claimant Count Change in September is seen rising by 2.3K against an increase of 0.7K in August. On the Eurozone front, investors await the preliminary Consumer Confidence data for October, which will be published at 14:00 GMT. The economic data is seen declining to -18.3 against the former reading of -17.8. This indicates a decline in the confidence of consumers in the growth prospects of the economy.
