Euro trims gains against the British Pound after UK jobs data, BoE rate decision looms

The EUR/GBP cross pares gains near 0.8650 during the early European trading hours on Thursday. The British Pound (GBP) trades flat against the Euro (EUR) following the UK employment report. All eyes will be on the Bank of England (BoE) interest rate decision later on Thursday.  

Data released by the Office for National Statistics (ONS) on Thursday showed that the UK ILO Unemployment Rate fell to 4.9% in the three months to April, down from 5.0% in March. This figure came in below the market consensus of 5.0%.

Meanwhile, the number of people claiming jobless benefits rose by 31.2K in May, compared with a revised increase of 8.3K in April and the expected 25.8K gain.  

The attention will shift to the BoE policy meeting. The UK central bank is set to leave the interest rates unchanged at 3.75% on Thursday. Traders will closely monitor the press conference, as Governor Andrew Bailey could offer some hints about the UK interest rate outlook. 

Last week, the European Central Bank (ECB) hiked its key interest rates, saying “the war in the Middle East is generating inflation pressures.” This marks the first rate increase since September 2023, after seven consecutive meetings where interest rates were kept on hold.