- Solve real problems with our hands-on interface
- Progress from basic puts and calls to advanced strategies
Interactive Options Course
Posted August 8, 2025 at 11:20 am
Increased clarity regarding global trade is a tailwind for the UK economy, but the Bank of England’s recent decision to cut its key interest rate following a hotter-than-anticipated inflation print illustrates the significance of labor market conditions. The monetary policy authority, in the end, prioritized employment health over price pressures considering that job losses are mounting amidst quickening cost forces. But it took an unparalleled two rounds of voting to reach a majority.
More specifically, weakening employment trends convinced 5 of the bank’s 9 policy members to eventually vote in favor of trimming the benchmark rate from 4.25% to 4%. Following the move, the BoE maintained that it is committed to reducing inflation and to reaching its 2% target. The decision comes shortly after data depicted a 0.1% month-over-month (m/m) decline in gross domestic product and a slowing job market. The Consumer Price Index, however, climbed from 3.4% year over year in May to 3.6% in June, almost double the institution’s objective.
In June, the UK surrendered 41,000 payrolled workers relative to the previous print and it marked the 7th month of job losses in the past 8. Additionally, payrolls have declined for 5 consecutive months following an incredibly modest gain of 1,425 employees in January. Further justifying the monetary policy accommodation, the unemployment rate has climbed from a cycle low of 3.6% to 4.7%.
Consumer spending, furthermore, remains weak, with volumes still 2.7% lower than the pre-pandemic level in February 2020. In May, retail sales declined 2.8% m/m. The decrease was followed by a weaker-than-expected 0.9% increase in June.
In another matter, BoE Governor Andrew Bailey opined that U.S. Federal Reserve Chair Jerome Powell is a man of “utmost integrity.” Powell has been criticized by US President Donald Trump for not supporting a faster pace of interest rate reductions.
For specific platform feedback and suggestions, please submit it directly to our team using these instructions.
If you have an account-specific question or concern, please reach out to Client Services.
We encourage you to look through our FAQs before posting. Your question may already be covered!
Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.
This material is from IBKR Macroeconomics, an affiliate of Interactive Brokers LLC, and is being posted with its permission. The views expressed in this material are solely those of the author and/or IBKR Macroeconomics and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Related Articles
Wanker move for a central bank to prioritize employment over price stability. Cheap money is a serious drug addiction.