European session review: GBP recovers after BoE policymaker Saunders’ hawkish comments

GBP traded mixed against its major rivals in the European session on Thursday, as investors digested hawkish comments by the BoE’s MPC member Michael Saunders.

Saunders said that it might become appropriate fairly soon to withdraw some stimulus. He also noted that options to withdraw stimulus include curtailing the BoE’s quantitative easing (QE) program (stopping it in the next month or two) and/or further policy action (rate hike)  next year. The official also added that the question of whether to curtail the BoE’s current asset purchase program early would be considered at the central bank’s forthcoming meetings. 

Saunders’ hawkish remarks outweighed uncertainty over the impending end to the UK’s remaining COVID-19 restrictions, set to be removed on July 19, as coronavirus infection rates climbed. This uncertainty weighed on GBP earlier today.

The pound also got some help from today’s ONS labour market report, which showed that the number of payroll employees in the UK climbed by 356,000 jobs in June and the average weekly earnings (including bonuses) surged 7.3% y/y in the three months March to May, recording their biggest increase since series began in 2001.