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MNI BRIEF: Strong UK Jobs Market Ups Pressure On BOE

(MNI) London

The total number of employed people in the UK rose to 30 million for the first time in May, as another strong set of labour market data increases the pressure on the Bank of England ahead of their June policy meeting.

Office for National Statistics data showed payrolls in May increased by 23,000 to 30 million, coming on top of a strong upward revision of 7,000 to the April figure -- which initially showed a surprise decline of 136,000. The unemployment fell to 3.8% from 3.9% in April and overall employment by the ILO measure rose by 250,000 on a rolling 3 months as workers returned to the workforce.

Wages also rose strongly, with average weekly earnings rising to 6.5% and ex-bonuses rising to 7.2%. In part, the strong gains in April reflected the near 10% increases in both minimum and living wages.

The data will make uncomfortable reading for the MPC ahead of next-week's policy meetings and probably nails on a 25 bps hike -- and probably offers some ammunition to the more hawkish members to at least discuss a return to 50 bps hikes. On Monday, BOE MPC member Cathy Mann highlighted the problems caused by higher wage deals. (MNI BRIEF: BOE Mann Worried By Services, Core Goods Inflation)

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MNI London Bureau | +44 203-865-3812 |
MNI London Bureau | +44 203-865-3812 |

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