The British pound is outperforming as strong jobs data refocuses attention on hikes rates from the Bank of England (BoE). Economists at Scotiabank expect the GBP/USD pair to stage a recovery towards the 1.36 level.

BoE set to hike rates in December

“Payroll data for October showed a 160K increase in employment – following the September end of the furlough programme – and vacancies rose to a new record high. It is the jobs picture that prevented the BoE from hiking rates at its November meeting so today’s solid print increases the possibility that the Bank hikes in December – although markets may go into the meeting with more caution.”

“Wednesday’s CPI release will act to pressure the bank into action next month and we think the GBP has a solid path to recovery toward the 1.36 level, at least, in the coming weeks.”