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NatWest: Connecting The Dots

-UK Jun-Aug RWE +3.1% 3m/year-ago, joint-highest since Q4 08
-UK Jun-Aug Real RWE +0.7% 3m/year-ago, highest since Q4 2016
     By Laurie Laird and Jamie Satchithanantham 
     London (MNI) - UK earnings growth accelerated sharply in the three 
months to August, as long predicted by the Bank of England, even as the 
number of people employed fell for the first time since the three months 
to October of 2017. 
     Employment declined by 5,000 to 32.39 million, after increase of 
just 3,000 in the three months to July, well below the MNI median 
forecast of a 15,500 gain. 
     That took the employment rate to 75.5%, matching the rate in the 
three months to July, down 0.1 percentage point from the three months to 
     Unemployment declined by 47,000 in the three months to August, to 
1.36 million, even as inactivity jumped by 103,000 to 8.75 million, 
taking the inactivity rate to 21.2%, highest since the final quarter of 
     Joblessness, as measured by the Labour Force Survey, steadied at 
4.0% in the June to August period, in line with the MNI median forecast, 
unchanged from the three months to July, matching the lowest rate since 
the three months to February of 1975. 
     The outturn also matched the 4.0% jobless rate forecast of Bank of 
England staff, as published in the August Quarterly Inflation report. 
     Despite falling employment, workers enjoyed an upturn in wages in 
the latest three months, an acceleration long awaited by the Bank of 
England's Monetary Policy Committee. 
     According to minutes of the Bank's September rate-setting meeting, 
MPC members noted that, "Surveys had indicated that recruitment 
difficulties were widespread across the economy ... Consistent with 
that, the vacancy rate had risen again and expectations of hiring from 
surveys had continued to point to solid labour demand." 
     Total weekly earnings increased by an annual pace of 2.7% in the 
three months to August, the fastest rate since the three months to 
February of 2018, above the MNI median forecast of 2.6%, up from a 2.6% 
gain in the previous three months. 
     With inflation accelerating in August, real wages, including 
bonuses, rose by 0.4% in the latest period, the highest rate since the 
three months to January 2017. 
     However, the Office for National Statistics uses the CPIH measure 
to discount nominal wages, which hit an annual rate of 2.4% in August, 
or 0.3 percentage points below the price measure targeted by the Bank of 
England. When discounted by CPI, real wage growth grew by an annual rate 
of 0.2%, according to a National Statistics official. 
     Excluding bonuses, regular earnings, before adjusting for 
inflation, improved by an annual pace of 3.1% in the latest three-month 
period, above the MNI median of a 2.9% gain, up from 2.9% in the 
previous period. The rate was last higher a decade ago, when it recorded 
3.3% in the three months to December 2008.  
     Price-adjusted regular earnings -- again, discounted by CPIH -- 
rose by 0.7% over the same period a year earlier, the fastest pace since 
the fourth quarter of 2016. 
     Job vacancies rose by 3,000 in the three months to August, compared 
to the three months ending in May, but remained a touch below the record 
high of 833,000 recorded in the three months to July. 
     The jobless rate fell to 4.0% in the month of August, according to 
experimental data, from 4.1% in July. 
     The more up-to-date claimant count rose by 18,500 in September, 
leaving the associated unemployment rate at 2.6%, unchanged from July. 
     The claimant count for August was revised to show a 14,200 rise, 
compared to the 8,700 increase reported last month. 
London bureau: 44 (0) 203 865 3812; email: