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14 Oct 2015
GBP: UK labour report offered mixed signals – TDS
FXStreet (Delhi) – Paul Fage, Senior Emerging Markets Strategist at TD Securities, notes that the UK turned in a mixed set of employment data with the ILO's 3MMA unemployment rate ticked lower to 5.4%, as we expected, falling below the consensus forecast for an unchanged reading.
Key Quotes
“Wage growth was particularly weak, however. This slowed to a 2.8% pace on an ex-bonus basis, against expectations for a rise to 3.0%. In our view, the wage data may have a particular resonance with the BoE as policymakers there appear to be growing more sensitive to wages - and their potential impact on inflation. Accordingly, this fits very much with the recent pattern of deceleration in UK macro data that is likely to keep the MPC sidelined until May of next year, as we expect.”
Key Quotes
“Wage growth was particularly weak, however. This slowed to a 2.8% pace on an ex-bonus basis, against expectations for a rise to 3.0%. In our view, the wage data may have a particular resonance with the BoE as policymakers there appear to be growing more sensitive to wages - and their potential impact on inflation. Accordingly, this fits very much with the recent pattern of deceleration in UK macro data that is likely to keep the MPC sidelined until May of next year, as we expect.”