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Private regular wage data not coming down as fast as previously expected

UK DATA
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  • Looking a bit more into the private sector regular AWE data, there was an upward revision to the single month November data which increased the single month estimate from 6.0%Y/Y to 6.3%Y/Y (which makes it a 1.8ppt fall from the period 3 months earlier with the same cohort).
  • The October single month data was unrevised at 6.2%Y/Y (a 1.8ppt fall from the period 3 months earlier with the same cohort).
  • And the new December single month estimate was +6.2%Y/Y (down 1.3ppt from the period 3 months earlier).
  • Note that the forecasts for this had been assuming all 3 cohorts would be falling around 2ppt - so part of this is due to an upward revision to the November data, but the December single month data coming in higher than expected is the larger driver to the upside surprise to the wage data - and at first glance indicates that wages aren't coming down as fast as had previously been expected. Which all things equal will make the MPC more likely to keep rates on hold for a bit longer.
  • We will look more into the breakdown of the data and of course we have CPI data tomorrow, too, and another print of both before the March MPC meeting.
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  • Looking a bit more into the private sector regular AWE data, there was an upward revision to the single month November data which increased the single month estimate from 6.0%Y/Y to 6.3%Y/Y (which makes it a 1.8ppt fall from the period 3 months earlier with the same cohort).
  • The October single month data was unrevised at 6.2%Y/Y (a 1.8ppt fall from the period 3 months earlier with the same cohort).
  • And the new December single month estimate was +6.2%Y/Y (down 1.3ppt from the period 3 months earlier).
  • Note that the forecasts for this had been assuming all 3 cohorts would be falling around 2ppt - so part of this is due to an upward revision to the November data, but the December single month data coming in higher than expected is the larger driver to the upside surprise to the wage data - and at first glance indicates that wages aren't coming down as fast as had previously been expected. Which all things equal will make the MPC more likely to keep rates on hold for a bit longer.
  • We will look more into the breakdown of the data and of course we have CPI data tomorrow, too, and another print of both before the March MPC meeting.