The GBP/USD price went sideways after the latest economic data from the United Kingdom. The pair is trading at 1.3121, where it has been in the past few days. This price is also about 1.38% below its highest point this month.
UK GDP and house price data
The UK economy did relatively well in the fourth quarter even as the Omicron variant spread. According to the Office of National Statistics (ONS), the country’s GDP expanded by 1.3%, which translated to a year-on-year increase of 6.6%. The two increases were better than the median estimates of 1.0% and 0.8%.
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The economic growth was broad-based, with multiple sectors providing the strength. For example, business investments increased by 1.0% in Q4. Personal consumption also did well in the fourth quarter even as the Omicron variant spread.
The GBP/USD pair reacted mildly to this report because analysts believe that the UK economic performance will be a bit weak because of the ongoing crisis in Ukraine. The crisis has pushed the overall cost of living higher, with products like wheat and crude oil rising sharply.
Therefore, the Bank of England (BOE) is in a fix as concerns about stagflation happen. This is a period when high inflation is usually accompanied by slow economic growth.
The GBP/USD pair also reacted mildly to the latest UK house price index (HPI) data by Nationwide. The numbers revealed that the country’s home prices rose by 1.1% on a month-on-month basis. This growth led to an annualized growth rate of 14.3%, which was the highest point since 2004.
US jobs data ahead
The next key catalyst for the pair will be the upcoming US jobs data that are scheduled on Friday. Economists expect the data to show that the country’s nonfarm payrolls rose by 490k in March after rising by 678k in the previous month.
On Wednesday, data by ADP revealed that the economy added over 555k jobs in March. Another data published this week showed that the number of vacancies in the country remained above 11 million.
Other numbers are also expected to show some progress of the US labor market. For example, analysts expect that the unemployment rate declined to 3.7% while the average hourly earnings rose by 5.5%.
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Source: https://invezz.com/news/2022/03/31/gbp-usd-muted-as-uk-home-prices-surge-accelerates/