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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
UK
Tuesday's UK labour market data (0700UK) - especially the wage data for June - marks the first in a series of 3 key data points this week (CPI Weds, Retail Sales Fri).
- The general drift of recent data has been in a loosening direction but with the labour market remaining tight enough to generate strong earnings growth.
- This includes a surprise 0.2pp rise in the unemployment rate in last month's report for May to 4.0% on the quarter (driven by a rise to 4.3% in May from 3.6% in Apr) with the inactivity rate falling, alongside vacancies and employment growth trending lower as well.
- But regular weekly earnings came in at 7.3% 3M Y/Y, joint-highest on record, topping consensus by 0.2pp. For June's report regular ex-bonus is seen ticking up to 7.4%; overall weekly earnings are likewise seen coming in at 7.4% (6.9% prior). No consensus for private sector equivalent which posted 7.7% in May.
- Wages will be a key input for the MPC going into September's decision (92% market-implied probability of a 25bp hike), as they continue to climb despite policymakers saying they are starting to see some easing in tight labour markets - albeit at a slower pace than they would like to see.
- In its August Monetary Policy Report, the BOE foresaw earnings growth dropping from 6% in 2023 to 3.5% in 2024 and 2.5% in 2025, but MPC minutes noted that pay has risen more strongly than the Bank's standard models would have predicted.
- In an interview with our Policy Team, NIESR deputy director Stephen Millard points out that the BoE might have to revise up its assumptions of U*, the estimated unemployment rate at which inflation is stable. (See "MNI INTERVIEW: BOE Likely To Revise Up View Of Wage Growth", Aug 14).
Source: ONS, MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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