Sterling fell on Thursday but remained on course for a fourth weekly rise against the Dollar as additional UK data revealed the Bank of England may not have as much possibility to slash rates at next month’s meeting.

Average weekly earnings excluding bonuses, which is a key inflation gauge for the Bank of England, rose by 5.7% in the three months to the end of May compared to the year before, in line with average forecasts.

At the time of writing, the Pound was down 0.1% at $1.2995, after trading at a session high of $1.30125 before the wage growth figures were published.

“The slight decline in wage growth will be welcome to the Bank of England, after the disappointing services inflation yesterday. There is still some key data to come before the August Monetary Policy Report but the decision is very finely balanced,” said Hetal Mehta, head of economic research at St. James’s Place.

Furthermore, the monthly consumer price report on Wednesday revealed service sector inflation held steady at 5.7%, whilst headline inflation stayed at 2%, Reuters reports.

In addition, economic growth is also rallying. Total UK GDP rose by 0.4% in May, according to a report out on 11th July, following zero growth the month before, and above forecasts for a 0.2% increase.

As it stands, futures markets predict a 40% chance of a 25-basis point cut to 5.0% at the Bank of England’s 1st August meeting, a fall from 50% at the beginning of the week and from 60% at the start of the month.

Moreover, on Wednesday Sterling surpassed $1.30 for the first time since last July, and so far this year is up 2.1% against the Dollar. This makes it the best-performing major currency of 2024, following last year’s 5.3% increase.

Whereas against the Euro the Pound has risen 3% this year, the strongest in almost two years.

Euro/Sterling was trading flat on Thursday at 84.12 pence.

According to analysts, the Pound is set to stay in a relatively tight trading range.

“Sterling has overcome $1.30 and so far trades at one-year highs at $1.3045. Further up beckons the 18 July 2023 peak at $1.3126,” stated IG technical analyst Axel Rudolph.