Labour market data due at 7:00GMT

Labour market data is due at 7:00GMT. Today's labour market report, alongside tomorrow's inflation report, will probably be the two pivotal data releases ahead of the February MPC decision.

• In today's report there the experimental HMRC payroll data will be closely watched (referring to the December period) but also the average earnings numbers (which cover the 3 months to November).
• Wage growth is expected to pull back further from their highs but to remain at elevated levels of 4.2% (from a peak of 8.8% in the second quarter). This fall largely reflects base/compositional effects returning to more normal levels.
• Excluding bonuses, regular wage growth is expected to fall to an annual pace of 3.8% from 4.3% previously and 7.3% recorded in the June quarter.
• While employment is expected to rise by a healthy 128,000 in the three months to November, after a 149,000 rise in October period, analysts will closely monitor the level of vacancies, which fell by 80,000 between October and November. The LFS unemployment rate is expected to remain at 4.2%.
• Markets are currently pricing in around a 90% probability of a February 25bp hike (following on from the 15bp hike in November). A strong print today is likely to cement that pricing a little but there is more scope for a negative print to move markets here. As has been the case with other data releases recently, the reaction in FX at the time of release may be rather muted, before seeing a delayed reaction when SONIA futures open at 7:30GMT.