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Labour market data a little disappointing

UK DATA
  • Wage growth lower than expected on the inc bonus measure (but underlying ex bonus in line with expectations), number of payrolled employees rose about half the expected pace, and downward revision to May but the ILO employment rate rose faster than expected.
  • Overall this is a bit disappointing and probably slightly reduces the probability of a 50bp hike next week (relative to the 48bp priced by markets ahead of the data release). But we of course have inflation data due for release tomorrow which will again be a big driver for markets.
  • “Following recent increases in inflation, pay is now clearly falling in real terms both including and excluding bonuses. Excluding bonuses, real pay is now dropping faster than at any time since records began in 2001.” ONS head of labour market and household statistics David Freeman

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