UK’s slowing wage growth drop crumbs to BoE’s doves


UK’s slowing wage growth drop crumbs to BoE’s doves

The British Pound is losing ground against the US Dollar for the second day in a row as pressure mounts on fresh UK employment data.

Data for February showed a rise in Claimant Count by 16.8K - the biggest since April last year. Overall, a moderate growth trend has now been in charge for a year, after almost a year of stagnation.


The pace of wage growth has continued to slow. Earnings growth, including bonuses, slowed to 5.6% in the three months to January from 5.8% previously. This is the lowest rate in a year and a half and below the forecast of 5.7% but well above the historical average of 3.3%.


At 3.9%, unemployment remains close to lows not seen since the mid-1970s.

On balance, the labour market indicators allow the Bank of England to ease monetary policy at a much earlier date while not fuelling speculation of an imminent or imminent economic contraction. Despite high interest rates, full employment is supporting domestic final demand, which accounts for over 80% of the UK GDP.


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