The pair also jumped after the US published encouraging consumer inflation data. It was trading at 1.2622 on Wednesday, higher than this week’s low of 1.2488.The UK labor market is doing well as evidenced by the latest jobs numbers. On Tuesday, the Office of National Statistics said that the economy added over 250k jobs in the three months to April, a higher figure than the median estimate of 150k. The unemployment rate dropped to 3.8% while the average earnings excluding bonuses jumped by 7.2%.
Therefore, there is a likelihood that the BoE will continue hiking interest rates for a longer period than expected. For example, UK’s gilt yields continued rising, reaching the highest level since the “mini” budget fiasco a few months ago. This is a sign that the market expects that the BoE will hike at a faster pace going forward.