The GBP/USD pair has been under pressure since mid-September, following the unexpectedly dovish outcome of the Bank of England's September meeting. While pound buyers have launched regular counterattacks, their short-term victories have mostly been fueled by U.S. dollar weakness rather than genuine pound strength.

To recap briefly, last month the Bank of England held interest rates steady but signaled a readiness to lower them in the near future. The central bank notably softened its tone, stating that the disinflationary trend "continues overall."

Moreover, contrary to the expectations of most analysts, the Monetary Policy Committee voted 0–2–7 (zero for a hike, two for a cut, seven to hold), rather than 0–1–8. Committee member Alan Taylor supported his colleague Swati Dhingra in voting for a 25 basis point cut.

In other words, the central bank made it clear that it is ready to continue easing policy if economic conditions support such a move.

Given this policy stance, the macroeconomic reports scheduled for release this week—important in their own right—gain heightened significance. If the data comes in "in the red," showing signs of economic slowdown, the likelihood of a rate cut at the next (November) meeting will increase significantly.

On Tuesday, October 14, key U.K. labor market data will be released. According to forecasts, the unemployment rate for August is expected to remain unchanged at 4.7%—marking the fourth consecutive month at this level. However, as a lagging indicator, the unemployment rate will not command traders' full attention. Focus will shift to more dynamic and timely components of the report.

Notably, jobless claims are forecast to rise by 12,000 in September, following a 17,000 increase in August. If confirmed, this will serve as a moderately but steadily negative signal, indicating a cooling labor market.

Additionally, if average earnings excluding bonuses slow to 4.7% (as most analysts anticipate), it will further weigh on the pound. Wages in the U.K. previously grew at a rate of 5% or higher from October 2024 through May 2025, and even exceeded 7% in earlier peak periods—contributing to inflationary pressures and supporting BoE hawkishness. A slowdown to 4.7% year-over-year would mark the weakest wage growth in over a year, signaling reduced inflationary pressure from domestic demand.

In short, preliminary forecasts suggest bad news for the pound. If the labor market report meets expectations—or worse—GBP may come under additional pressure.

However, the most important macroeconomic release for GBP/USD will follow on Thursday, October 16. That day, key data on the growth of the British economy will be released. Although the U.K. statistical system reports with a noticeable time lag (in October, we'll be looking at August data), the release is still expected to spur significant volatility in GBP/USD—especially if the figures fall short of forecasts.

Specifically:

• August GDP is expected to rise by 0.1% m/m after flat growth in July
• Quarterly GDP is expected to remain at 0.2%
• Industrial production should increase 0.2% m/m after a 0.9% drop in July
• Manufacturing output is also seen growing 0.2% m/m after a 1.3% decline
• Construction output is expected to fall by 0.2% m/m after rising by the same margin previously
• The services activity index is forecast to remain at 0.2%

What does this suggest? If the figures meet expectations or come in weaker, they will reflect anemic and uneven growth in the British economy, with minimal gains in GDP and industrial production, and contraction in construction. This outcome would allow the Bank of England to reduce rates by 25 basis points next month, especially if labor data aligns with GDP weakness.

Naturally, such results would put additional pressure on the pound—even against the weakening U.S. dollar.

Technical Outlook

Technically, sell positions remain favored on the GBP/USD daily chart. The pair trades between the middle and lower bands of the Bollinger Bands indicator and remains below all lines of the Ichimoku indicator, which has formed the bearish "Parade of Lines" signal.

The first (and so far only) downside target lies at 1.3270—the lower boundary of the Bollinger Bands channel on the D1 timeframe.