The cooling labor market in the UK raises the likelihood that the Bank of England will cut interest rates in August

HSBC analyst Elizabeth Martins said in a note that the U.K. jobs data could turn the tables in favor of the Bank of England's August interest rate cut. Slower wage growth and rising unemployment have raised the market price for such an outcome.
Recent policy could move wage growth in the opposite direction: a new payroll tax could reduce wage growth, while a rise in the minimum wage could raise it. The answer seems to be that the Bank of England has been too dovish so far. Even if May's inflation data were weaker than expected, that would not be enough to prompt Bank of England policymakers to cut interest rates next week.