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JGBS AUCTION

Japanese MOF sells Y2.0991tn 10-Year JGBs:

By David Robinson
     LONDON (MNI) - A Bank of England agents report, published Thursday, found
that consumer facing sectors were set to lower their headcount, with the retail
sector looking at the most striking job losses.
     UK employment growth had hit record high levels but the BOE agents report
for the second quarter points to a downturn with a shrinkage in jobs in the
labour intense retail sector. The survey painted a picture of subdued overall
growth in Q2, with growth in consumer services slowing and the construction
sector failing to make up all the ground it lost in the first quarter as a
result of the bad weather.
     The decline in retail employment is, at least in part, a result of
structural changes caused by high street store closures.
     "Employment intentions in consumer-facing sectors had weakened further,
indicating contracting headcount. This primarily reflected job cuts in retail on
the back of store closures and rationalisation of management and support roles,"
the agents report said.
     Consumer services employment intentions fell to -0.9 on the agents scores
for June from -0.5 in April, taking it back to a level last seen in November
2009.
     --BUSINESS SERVICES
     Business services and manufacturing looked set to see modest employment
growth. The agents found evidence of widespread recruitment difficulties and in
some cases these were restricting jobs growth, with most acute labour shortages
in information technology, construction and engineering.
     Pay settlements ticked up to average 2.5 to 3.5%, up from the 2% norm in
recent years. The introduction of the National Living Wage was cited as the key
factor behind higher consumer services pay growth.
     --BREXIT SEEN AS MODEST NEGATIVE
     The BOE also released its quarterly Decision Maker Panel (DMP) results. The
DMP is a large scale survey of chief financial officers designed to capture the
likely impact of Brexit.
     It found that business representatives were, on average, expecting a
modest, but more negative, effect from Brexit. Extrapolating from the results
the reports authors estimated that the expected negative impact of Brexit on
sales had risen to 3% from just over 2%.
     Brexit was cited as one of the three top sources of uncertainty by 37% of
respondents and the authors estimated on a simple regression to have lower
business investment by 3 to 4 percentage points in the year to mid-2017. The
evidence is that the effect of Brexit on investment has not got any larger since
then but nor has it unwound. 
--MNI London Bureau; tel: +44 203-586-2223; email: david.robinson@marketnews.com
[TOPICS: M$B$$$,M$E$$$,M$$BE$]
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com