Barclays: GBP outlook into CPI, labor data and BoE Minutes – eFXnews

FXStreet (Barcelona) - The eFXnews Team notes Barclays views GBP/USD risks lie to the downside in the short-term as inflation is projected to ease further in January to 0.4%yoy.

Key Quotes

“Barclays Capital expects today's UK CPI inflation to have eased to 0.4% y/y in January, from 0.5% y/y in December last year, mainly due to weak energy prices.”

“On labour market data (Wednesday), Barclays expects the unemployment rate to remain unchanged at 5.8% (consensus: 5.7%) after dropping from 6.0% in November.”

“…we continue to expect short-term downside pressures to GBPUSD but note significant upside risks in the medium term as wages continue to pick up and the slack of the UK economy diminishes further," Barclays argues.”

“On the BoE minutes (Wednesday), Barclays expects the new consensus formed at the January MPC (9-0) to hold at least until mid-year.”

"Until then short-term downside risks to inflation are likely to dominate any policy debate, posing downside risks to GBPUSD," Barclays adds.”

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