Data out of the UK this morning point to ultra-tight conditions in the jobs market, as unemployment unexpectedly fell again to 3.8% and average weekly earnings jumped from 5.8% to 6.5%.

We keep highlighting the risks for sterling of dovish repricing in the BoE rate expectations down the road, but with data pointing consistently to more tightening recently, it’s hard to buck the bullish GBP trend in the near term. Still, GBP/USD may well default to being driven by the Dollar leg as soon as the US CPI risk event kicks in.