UK jobs market showing wage cost pressures which could see BoE push for rate rise
After yesterday's weak growth figures, the employment report this morning paints a healthier picture as jobs rise 32k vs expectations of a fall of 1k in the 3 month on 3 month measure. What was more significant however was the ex-bonus wage increase which has risen from 3.1% (now revised to 3.3%) annualised to 3.4%, and this could prompt the BoE to seriously consider a rate hike despite the lack of developments on the Brexit front.
MPC members - Saunders more recently - have suggested modest tightening could be warranted in light of these economic pressures, which could lift inflation with low levels of GBP also causing some of this.
The unemployment rate is still at 3.8% however, though these multi-year lows are also reflective of a strong labour market at present, while the claimant count was only marginally higher at 23.2k in this morning's report.
The BoE meet next week, so the market will perhaps start thinking on the central bank mood, as the Brexit process has effectively been delayed by the contest for a new Tory (and national) leader, which kicks off today after the announcement of the 10 candidates last night.