GBPUSD Rips to 1.3670, Highest Since February, as UK Services PMI Beats Every Forecast

GBP/USD pushed above 1.3670 on Friday, its highest level since February, before easing back to trade around 1.3650 to 1.3660. The pair is running a 0.8% weekly gain and has added 1.98% over the past month, putting it 1.66% higher over twelve months.

Thursday set it up. Cable closed August 20 at 1.3641, up 0.26%, after reaching an intraday low of 1.3594 and grinding higher through the North American session on solid US jobless claims data. That was already the best level since mid-February. Friday extended it on a UK services print that beat every forecast in the market.

The path here has been methodical rather than explosive. Sterling stabilized at 1.34 in early August, tagged 1.3556 on August 17 as Fed hike bets unwound, pushed to 1.354 and then 1.356 midweek on UK inflation data, and cleared 1.36 after the Treasury intervened in its own bond market on Wednesday. Five sessions, roughly 110 pips, no down day of consequence.

The year-to-date context matters because sterling has been volatile in both directions. The pair entered 2026 above 1.38 with genuine momentum, traded a 1.38 to 1.31 range from January through April, then fell sharply to 1.31 in May and June on weak UK GDP and the surprise resignation of the prime minister. It broke above 1.34 for the first time in a year on July 10 at 1.343.

From 1.31 to 1.3670 is a 4.4% recovery, and it has been driven far more by the dollar than by the pound.

The dollar index sat at 98.67 to 98.79 on Friday after refreshing a three-month low at 98.55 on Thursday — a level last seen on May 14. The greenback is heading into the weekend with a weekly loss across the G10 complex, weakest against the Swiss franc.

What makes Friday's move notable is that it came despite a domestic data miss. UK retail sales contracted 0.5% in July. Cable showed no immediate reaction and finished higher anyway. When a currency ignores bad news and rallies, the driver is on the other side of the pair.

The next reference above is the January high at 1.3870. That is 1.5% away.

The Services PMI At 52.8 Blew Past Every Forecast

The UK data that actually mattered Friday was the flash PMI, and it delivered a genuine upside surprise.

The S&P Global Flash UK Services Business Activity Index rose to 52.8 in August from 52.1 in July — a six-month high that came in above every single forecast in the Reuters poll, which had pointed to a fall to 51.8. That is not a marginal beat. It is a print outside the entire distribution of expectations.

The composite followed. The headline Flash UK PMI Composite Output Index posted 52.5, up from 52.2 and above the 50.0 no-change level for the second consecutive month. That is a four-month high against consensus looking for a decline to 51.6. Data were collected between August 12 and 19.

The reading is consistent with economic growth of around 0.3% — an improvement on the roughly 0.2% signalled by July's survey and a substantial upgrade from the flat picture that defined the second quarter.

Manufacturing went the other way, exactly as expected. The Manufacturing PMI cooled to a five-month low of 51.5 from 51.9, with the Manufacturing Output Index dropping harder to 51.2 from 52.9. The explanation is straightforward: precautionary stock building that inflated earlier readings has started to fade as concerns about the economic impact of the Middle East war ease at the margin. Geopolitical uncertainty and elevated costs continued to weigh on order books.

Business confidence improved to its strongest level since the Middle East war began, with services optimism hitting a seven-month high. Sunny weather and technology investment were cited as supports. That was corroborated by consumer confidence data released earlier the same day showing the highest reading since August 2024.

The context for how far this has come is worth stating. The UK composite printed 48.5 in May — a 13-month low and the first contraction since April 2025 — then 49.3 in June, before rebounding to 52.1 in July and 52.5 now. Three months ago the private sector was shrinking. It is now growing at the fastest pace since April.

That surprise strength is a bonus for a government that took office mid-year and has been bracing for a slowdown after solid first-half growth.

Retail Sales Fell 0.5% And The Pound Ignored It

The other UK release Friday was weak, and the market's response tells you where the driver sits.

Retail sales declined 0.5% on a monthly basis in July, following a 0.7% increase in June. That was in line with market expectations on the headline monthly figure, but the annual number missed badly — growth slowed to 1.6% against a 2.3% consensus and 4.2% prior. Previous months' readings were revised lower.

There is a softer reading underneath. Sales volumes rose 1.1% in the three months to July compared with the three months to April, with non-store retailers reporting gains attributed to promotions, sports merchandise and weather boosting sales of items like fans. Supermarket volumes also performed well. The three-month trend is positive even as the monthly print is negative.

Cable showed no immediate reaction and was last seen trading with small gains at 1.3650. That is the single cleanest evidence available that this rally is a dollar story rather than a sterling story.

The forecast community had expected exactly the opposite sequence. Friday's session was framed as one where retail sales would sap sentiment and slowing services growth would drag the pound lower still, with US PMIs closing the day and potentially lending the dollar support if they pointed to further private-sector resilience.

Two of those three assumptions were wrong. Retail sales came in weak and the pound held. Services accelerated rather than slowed. The US print is the only leg of the thesis still live.

The consumer picture in Britain mirrors what is happening in the United States, and for the same reason. Elevated fuel prices are eating discretionary spend. Brent at $93.96 and a distillate market with cracks at four-year highs transmits straight into household budgets in a net energy importer.

The counterweight is the confidence data. Consumer confidence at its highest since August 2024 alongside a single weak monthly retail print suggests the July contraction is timing rather than trend — households feel better about their prospects than their July spending implies.

Public finances add a constraint. July borrowing came in marginally higher than a year earlier as spending growth outpaced receipts despite strong self-assessed income tax revenue. Borrowing in the financial year to date sits below last year but above the official forecast, with debt just under £3 trillion at end-July.

Bessent's Buyback Is Doing The Heavy Lifting

The dominant variable in this pair is not British. It is the US Treasury.

On Wednesday the department announced it would at least double the size of its buybacks on longer-dated securities over the next quarter, lifting them from $2 billion to at least $4 billion per operation and targeting 10-, 20- and 30-year debt from September 9. The stated goal was providing liquidity at the long end of the curve. The market read it as something closer to yield curve control.

Long yields collapsed on the headline, the dollar dropped roughly 0.8%, and every G10 currency gained. GBP/USD went from the mid-1.35s to above 1.36 in a session.

By Thursday the bond market had rejected the premise entirely. The 30-year climbed back to 5.26%, erasing the move and returning to where it sat before the announcement. The 10-year pushed to 4.70%. Scott Bessent said he may increase the repurchases further and flagged a fiscal initiative addressing borrowing costs. Long yields did not care.

The dollar never recovered. DXY refreshed a two-and-a-half-month low at 98.55 — a level last seen May 14 — and has stayed pinned below 98.80.

That divergence is the trade. Doubling repurchases of long-dated paper pulls cash out of the Treasury General Account and into the private system, which raises dollar supply directly. Washington has signalled it will prioritize lower long-term yields and expand the dollar float to get there. That is negative for the currency regardless of what happens to the curve.

The confirmation sits across asset classes. Gold ripped to $4,601.52, a three-month high. Bitcoin ran to $79,241. Both rallied alongside a falling dollar even after yields fully reversed — a pattern that points at fiscal credibility rather than rate differentials.

The arithmetic behind it: US marketable debt outstanding exceeds $30 trillion, and from July through December the Treasury expects to borrow more than $10 billion net every business day. Bessent has also revealed that Gulf and Asian nations have requested dollar swap lines, which is a structural demand signal that has gone largely unremarked.

For cable specifically, this means the pound can rally on soft UK data as long as the dollar leg stays broken.

The 1.3658 May High Broke — And What Sits Above It

The technical structure flipped decisively this week.

The early May high at 1.3658 was the most important reference point on the chart — the level flagged as the marker to watch if bullish momentum built. Friday's push above 1.3670 cleared it. That converts a five-month ceiling into support and removes the last obstacle before the January high.

The base underneath is solid. Former resistance at 1.3400 and 1.3500 was reclaimed earlier in the month and now functions as support on dips. The cluster of former descending trend-line resistance that capped the pair through the spring, running roughly 1.3499 to 1.3409, has turned into a support band. Beneath that sits the grouped 50-, 100- and 200-day simple moving averages near 1.3390 — a dense confluence that would require a genuine reversal to break.

Momentum alignment is clean. The pair reclaimed the 21-day exponential average and spent only a few days below the 200-day during the late-July weakness. As of mid-August it traded above the 50-day EMA by 0.77% and above the 100-day EMA by 0.89%, with the shorter averages converging beneath price rather than above it.

The upward-sloping support lines that have guided the advance since the July base remain intact, and the pair has defended every meaningful dip.

The honest caveat is that cable is stuck inside a long-term consolidation. The 2026 range has run from 1.3870 at the January high to roughly 1.31 at the May-June lows — a 570-pip band that has contained everything. At 1.3670 the pair sits in the upper quarter of that range but has not escaped it.

Clearing 1.3870 would be the first genuine breakout of the year and would put the pair at levels not seen since the multi-year highs that opened 2026.

Below the structure, the reference points on a failure are 1.3594 — Thursday's session low — then 1.3500, then the 1.3499 to 1.3409 band. Losing 1.3390 would void the entire recovery and put 1.32 back in play.

The pair has spent this week converting resistance into support at three separate levels. That is what a trend change looks like on a daily chart.

The Levels: 1.3870 Overhead, 1.3500 And 1.3390 Underneath

Immediate resistance. 1.3670 is Friday's high and the highest print since February. A daily close above it confirms the break of the early May high at 1.3658 and opens the path higher.

Above that. 1.3700 is the round-number magnet immediately overhead. Beyond it, the January high at 1.3870 is the structural target and the last barrier before multi-year highs. That represents 1.5% of upside from current levels.

Extended. Above 1.3870, the pair would be trading at levels it has not held since the opening weeks of 2026, and no published consensus forecast has it there before 2027.

First support. 1.3658 — the early May high — is now the line that matters most. It flipped from resistance to support this week and holding it keeps the breakout structure intact. Below it, 1.3594 marks Thursday's session low.

Second support. 1.3500 is the round number reclaimed earlier this month and now functioning as a floor. It sits at the top of the 1.3499 to 1.3409 band formed by the old descending trend-line resistance.

Third support. The 1.3499 to 1.3409 zone is where dips should attract buying while the recovery from the July base stays intact. It is a wide band, which makes it a genuine defensive area rather than a single line.

Structural floor. The 50-, 100- and 200-day simple moving averages cluster near 1.3390. That confluence is the last defence. A daily close below it would signal the dollar's stabilization is developing into a broader recovery rather than a pause, and would open 1.3300 and then 1.32.

The clean framing for the next two weeks: above 1.3658 the bias stays higher with 1.3870 the target. Between 1.3500 and 1.3658 is consolidation. Below 1.3390 the recovery is void.

The immediate event risk is the US flash PMI, due Friday afternoon. Consensus looks for manufacturing unchanged at 53.9 and services easing to 54.0 from 54.6, against a July composite of 53.6 that marked an eight-month high. Those are strong absolute numbers — US activity is running well above UK levels even after Britain's beat. A firm print narrows the growth differential and gives the dollar a reason to bounce off 98.55.

UK Inflation At A Four-Month High Keeps The BoE Bid Alive

The pound's own leg rests on a central bank that is being pushed toward tightening rather than easing.

UK consumer inflation accelerated to 2.9% in July from 2.6% in June, matching expectations and marking a four-month high. Core inflation held unchanged at 2.6%. Bank Rate sits at 3.75%.

That print keeps the hiking case alive without forcing it. Markets are currently pricing 25 basis points of tightening by the December meeting, and the August PMI reinforced the argument on the cost side.

The price detail in Friday's survey was the hawkish part. Average cost burdens at private-sector firms increased sharply in August and the rate of input price inflation quickened from July's five-month low. The gauges of input and output prices partially rebounded after falling in July, reflecting the rise in global energy prices over recent weeks with no sign of the Iran war nearing an end.

That is the transmission mechanism that matters. July's cooler PMI price data had prompted speculation the Bank could avoid raising rates, focusing instead on supporting a faltering growth outlook. August reversed it. Cost pressures remain high, largely due to energy prices and supply disruption linked to the Middle East conflict alongside high staffing costs.

The assessment from the survey compiler was direct: the data suggest the Bank of England looks likely to keep a hawkish bias but will stay cautious, holding off any rate hikes until the growth and inflation trajectories become clearer.

That is the exact position that supports sterling without delivering the catalyst. A central bank with a hawkish bias and no imminent move gives the currency a floor but not a trend.

Services inflation has been the sticking point all year, running at 3.7% as recently as May — above the Bank's comfort level and unlikely to respond quickly to a single month of firmer data. Overall pay growth has moderated to 3.4% in the three months to May, well below the 2024 pace.

The mortgage constraint is real. For hundreds of thousands of households on tracker or standard variable rates, and an estimated 1.8 million whose fixed deals expire in 2026, a hold at 3.75% is preferable to a hike but still above the environment many anticipated entering the year.

The Labour Market Is The Hole In The Sterling Story

Every argument for a hawkish Bank of England runs into the same wall.

Unemployment held at 4.9% in June, above the 4.8% expected. Payroll employment declined by 86,000 year-on-year. Job vacancies fell to 707,000 in the three months to July — the lowest level since 2021. Private-sector regular pay growth slowed to 2.8% year-on-year, the weakest pace since late 2020, though overall regular earnings held relatively firm at 3.5%.

That is a labour market cooling on every metric that matters, and it has been doing so consistently rather than in one bad print.

The tension is obvious. A central bank facing 2.9% headline inflation and accelerating input costs has a case for tightening. The same central bank facing 4.9% unemployment, falling vacancies and the weakest private-sector pay growth in nearly six years has a case for patience. The August PMI resolved the growth side of that argument but did nothing for the employment side.

Pay growth at 2.8% in the private sector is arguably the single most important number in the UK dataset right now. Second-round inflation effects require wages to chase prices. At 2.8% against 2.9% headline CPI, real wages are flat and workers are absorbing the energy shock rather than passing it into the wage bill. That removes the mechanism that would force the Bank's hand.

The composition of the softness is worth noting too. The decline in payroll employment has been running continuously since the Autumn 2024 Budget, with firms consistently blaming higher National Insurance contributions for lower labour intake. That is a policy-driven drag rather than a demand-driven one, which makes it less responsive to interest rates in either direction.

The market has already partially adjusted. Following the July inflation print, traders modestly reduced expectations for a Bank of England rate hike later this year — even though the reading matched consensus. That reduction came because the labour data released alongside it was soft enough to offset the price data.

For GBP/USD, this is the constraint on how far the pound can run on its own merits. A December hike is priced. A faster path is not, and the employment numbers argue against one.

23 Months Of Services Job Losses — The Longest On Record

Buried in Friday's PMI release is a statistic that reframes the entire UK growth story.

Employment in the services sector declined again in August, extending the current period of falling headcount to 23 consecutive months. That is the longest run since the survey began in 1996. Service providers generally commented on the non-replacement of voluntary leavers in response to strong cost pressures.

The mitigating detail is that the pace of decline was the slowest since last October, and job losses across the private sector as a whole became less severe. Employment is still contracting, but the rate of contraction is easing.

That combination — output at a four-month high with employment falling for two straight years — describes an economy generating growth through productivity or hours rather than headcount. It is a fragile form of expansion, because it depends on firms squeezing more from a shrinking base rather than investing in capacity.

The cost explanation is consistent across the survey period. Firms have cited National Insurance contribution increases, elevated energy costs and general cost pressure as reasons for not replacing staff. Those are structural rather than cyclical, and lower interest rates would not fix them.

For the currency, this creates an asymmetry. Strong output data supports the pound because it keeps the hawkish bias alive. But an economy expanding while shedding services jobs for 23 months is one where any demand shock — a further energy spike, a consumer retrenchment, a global slowdown — translates into contraction quickly, because there is no employment buffer absorbing it.

The offsetting signals are genuinely constructive. Business confidence hit its strongest level since the Middle East war began. Services optimism reached a seven-month high. Consumer confidence rose to its highest since August 2024. Those forward-looking measures have historically led hiring by two to three quarters.

The assessment from one economist reading the release was that the composite index is providing increasingly encouraging signs the economy is finding firmer footing.

Whether that footing produces jobs is the question that determines whether 1.3870 is reachable.

December Is Priced For 25 Basis Points. September 16 Is The Fed's

The rate differential story is the cleanest way to frame this pair, and it has been moving in sterling's favour for six weeks.

On the UK side, markets are pricing 25 basis points of Bank of England tightening by the December meeting. Bank Rate sits at 3.75%. The August PMI reinforced the hawkish bias without accelerating the timeline, and the survey commentary explicitly flagged that the Bank will hold off on hikes until growth and inflation trajectories clarify.

On the US side, the funds rate has sat at 3.50% to 3.75% for five consecutive meetings. The July 28-29 decision passed 9-3 with three dissents favouring a hike. Minutes released Wednesday confirmed many officials think tightening will be necessary if inflation does not subside. Market pricing assigns roughly 69.9% probability to another hold on September 16, with the majority of participants no longer pricing a September move at all. Some desks see one hike this year but not until October.

That repricing has been dramatic. As recently as late June, hike odds for September stood near 68%. The June meeting — the current chair's first — removed the easing bias and lifted the median end-2026 projection to 3.8% from 3.4% in March, moving the committee's central expectation from cut to possibly hike. Then the data softened.

The catalysts: July nonfarm payrolls came in weak. July retail sales contracted 0.6%, the first decline in nine months. CPI and PPI both undershot. Three soft prints in one week took hike probability from 50% to 31%.

The offsetting data landed Thursday. Initial jobless claims fell to 206,000 against 210,000 expected and a revised 212,000 prior — not a labour market cracking.

The differential arithmetic is what matters. If the Bank hikes to 4.00% in December while the Fed holds at 3.625%, sterling carries a positive spread for the first time in this cycle. That is the scenario cable is beginning to price and it is why 1.3670 held despite a retail sales miss.

The scenario that breaks it is a Fed hike on September 16 combined with a Bank of England that talks hawkish and does nothing.

Jackson Hole On August 28 Is The Near-Term Landmine

Before either central bank meets, there is a speech, and the positioning going into it is crowded.

The Kansas City Fed hosts its symposium from August 27 to 29, with the Fed chair delivering the keynote on Friday, August 28 — his first in the role since taking office in May 2026. Under a regime that has deliberately withdrawn forward guidance from post-meeting communication, a keynote is one of the few venues where direction gets set, and every sentence will be parsed for a shift.

The setup is asymmetric for cable. The dollar is already at a three-month low, the pair is pressing a six-month high, and positioning has moved substantially in one direction across five sessions without a meaningful pullback. A hawkish keynote — any suggestion September is genuinely live, or that the committee sits closer to the three dissenters than the minutes implied — lands into crowded sterling longs and produces a sharp unwind toward 1.3500.

A neutral or dovish keynote confirms the hold, extends the divergence trade, and clears the path toward 1.3870.

There is a second US event in the same window. July PCE — the Fed's preferred inflation gauge — is released next week and will be the last report of its kind before the calculation methodology changes. Under a chair who has floated reviewing which indicators the Fed targets, a changing inflation measure is not a technicality.

The UK calendar into September is quieter. The next Bank of England decision and the CPI print that feeds it are the events that matter, and neither lands before the Fed has spoken.

That sequencing means the dollar sets the direction for at least the next fortnight regardless of what happens in Britain.

There is a broader structural point worth carrying. Bessent disclosed that Gulf and Asian nations have requested dollar swap lines — a demand signal for the currency that runs opposite to the debasement narrative currently driving it lower. That has gone largely unnoticed and it is the kind of flow that reasserts itself when positioning gets stretched.

Oil Cuts Both Ways For A Net Energy Importer

The variable that could break this trade is not a central bank. It is a barrel.

Brent traded $93.96 on Friday after tagging $94.24, the highest since July, with WTI at $86.94. Both are heading into the weekend with a second consecutive weekly gain above 5%. Hormuz transits fell to 73 in the week ended August 16 from 91 the prior week. Washington unveils its Iran sanctions package Monday.

The sterling-positive channel runs through inflation and the Bank's reaction function. Higher energy costs push UK headline CPI further above the 2% target and strengthen the case for the December hike already priced. The August PMI showed input and output price gauges rebounding specifically because of the rise in global energy prices over recent weeks. A central bank forced to tighten while the Fed holds is exactly the rate-differential story that drives cable higher.

The sterling-negative channel runs through growth and the terms of trade. The UK is a net energy importer with a structural current account deficit that widens every time crude and gas rise. The economy has already absorbed one energy shock this year — the composite PMI printed 48.5 in May and 49.3 in June before recovering. August's 52.5 came despite the disruption, not because it resolved.

Which channel dominates depends on duration. A short spike is inflationary and sterling-positive because the Bank reacts before the growth damage lands. A sustained blockade is stagflationary and sterling-negative, because the Bank ends up tightening into a slowdown and the currency prices the damage rather than the rate.

Survey respondents have consistently flagged the same thing: the Middle East and domestic policy concerns continue to have a damaging effect, with cost pressures high largely due to energy prices and supply disruption alongside staffing costs.

There is a third-order effect through the dollar. Oil is priced in dollars, and a sustained crude rally has historically supported the greenback through petrodollar recycling and terms-of-trade effects for a net exporter — which the US now is. That channel works against cable independently of what happens in Britain.

With no visible path to Hormuz normalization, the energy overhang is the largest medium-term risk to the sterling leg.

What The Consensus Targets Say — And Why They're Stale

The published forecasts and the traded price have separated, and the gap is informative.

The aggregated survey path reads 1.3327 for late 2026, 1.3479 for early 2027 and 1.3695 for late 2027, with a one-month projection of 1.3328. The stated bias across 25 providers is bearish.

Cable at 1.3670 is trading 343 pips above the late-2026 consensus and within 25 pips of where the survey expects it to be at the end of 2027.

Other frameworks cluster similarly. One puts the pair at 1.3300 to 1.3430 by year-end with downside risks from UK political uncertainty and a relatively more dovish Bank of England. Another models a December 2026 range of 1.2957 to 1.3485 with an average near 1.3221. A third projects 1.34 to 1.39 for 2026 with an average of 1.37. One AI-driven model has cable at 1.26 to 1.28 by end-2026 before recovering above 1.33 in 2027.

The wider framings are more useful than the point estimates. A 1.30 to 1.40 range for 2026 with two-sided rather than directional risk captures the reality better than any single number, and it puts Friday's price in the upper third but nowhere near the ceiling.

The staleness problem is structural. Most of these targets were constructed before the Treasury intervened in the long end of its own bond market, before Fed hike odds collapsed from near-100% to 31%, and while the assumption was that the Bank of England would be cutting rather than hiking. The inputs have changed materially and the published numbers have not caught up.

The 2027 outlook across the same sources is consistently more constructive: 1.3820 to 1.4100 in one framework, 1.3696 in another, driven by improving UK activity, easing inflation and expectations of a weaker dollar.

That is the honest synthesis. The medium-term structural case for sterling is intact across most frameworks — narrowing rate differentials, a dollar losing its exceptionalism premium, UK growth stabilizing. What keeps getting pushed back is the timeline.

The immediate barrier every desk identifies is the same: a clean break above 1.3700 exposes higher levels, while a retreat below 1.3500 suggests the dollar's stabilization is turning into a broader recovery.

GBP/USD Price Forecast: Base, Bull And Bear Into Q4

Base case. Cable consolidates between 1.3500 and 1.3700 over the next two weeks while the market waits for Jackson Hole. This is the highest-probability path. The pair has run 110 pips in five sessions without a meaningful pullback, positioning is crowded on the long side, and the US flash PMI due Friday afternoon is expected to show manufacturing holding 53.9 and services at 54.0 — absolute levels well above the UK's 52.5 composite. A dip that holds the old May high at 1.3658 and turns confirms the break; a slide back through 1.3500 says this week was a liquidity event. Watch the daily close against 1.3658 as the cleanest read on control.

Bull case. A daily close above 1.3700 opens the January high at 1.3870 and puts cable at levels not seen since the opening weeks of 2026. That path needs three things in sequence: a neutral-to-dovish Jackson Hole keynote on August 28, a Fed hold on September 16, and the Bank of England maintaining its hawkish bias into the December meeting where 25 basis points is already priced. Add the dollar index breaking 98.55 decisively and the UK composite PMI holding above 52 into September, and sterling clears 1.3870 before Q4. The structural support is real — a four-month high in composite output, a six-month high in services, business confidence at its best since the war began, and consumer confidence at a two-year high.

Bear case. A hawkish Jackson Hole keynote or a firm US flash PMI sends cable back through 1.3658 and toward 1.3500. Below the 1.3499 to 1.3409 band, the moving-average cluster near 1.3390 is the last defence, and losing it opens 1.3300 and then 1.32. The accelerant would be a Fed hike on September 16 combined with a Bank of England that talks hawkish and delivers nothing — the divergence trade collapsing into convergence. Sustained crude above $95 that cracks the UK growth recovery gets to the same place by a different road, given 23 consecutive months of services job losses leave no employment buffer.

What actually decides it. Three variables, in order. The dollar index at 98.55 — that three-month low is the technical floor, and a decisive break removes the last support under the greenback. The gap between the September 16 Fed decision and the December Bank of England meeting, which either delivers the first positive sterling carry of this cycle or collapses it. And oil, because a net energy importer running 2.9% inflation with 2.8% private-sector pay growth cannot absorb another shock without the growth story breaking.

Cable at 1.3670 has priced a Fed hold and a Bank of England hike. It has not priced the possibility that neither central bank moves at all.

That's TradingNEWS