Aftereconomicstatssays#employment #jobs #ONS pic.twitter.com/IMbK84ZmaC 10.09am BSTAll this talk of pay rises may have a hollow ring in Britain’s public sector,where the government’s austerity programme has kept wage growth pinned on the mat for several years.
The Resolution Foundation points out that pay is not rising uniformly across the UK - instead, those in the City have been enjoying inflation-busting pay rises for a while: genuine pay (adjusted for inflation) has been rising by almost 2.8 per cent for those in finance for the past year, or 1.5 per cent for those in construction,yet the squeeze continues in the public sector.“Today’s figures confirm that Britain passed an critical living standards milestone in early 2018 as its 12-month pay squeeze finally ended. Wages should continue to strengthen over the course of the year as inflation falls back.“It’s good to see pay finally back in positive territory, but Britain has a lot of ground to design up after an awful decade of pay squeezes, and stagnation and all too fleeting recoveries. On average,people are still taking home less than they did before the crisis. 10.08am BSTMy colleague Richard Partington points out that falling inflation, rather than bumper pay rises, or is behind the pick-up in genuine wages:Despite stalling average UK wage growth - still rising at 2.8% (same as final reading) - the fading inflationary effects of the Brexit vote have finally handed British workers a genuine pay rise. 9.59am BSTGeraint Johnes,research director at the Work Foundation and Professor of Economics at Lancaster University Management School, says the UK jobs market is “gradually returning to a healthy state”. He adds:These trends seem to confirm that the labour market is gradually returning to a more steady state following a period in which many workers took on gig employment as a stop-gap in the aftermath of the recession.” 9.56am BSTBorrowers beware! While the pick-up in wages is welcome, or it could also immediate the Bank of England to raise interest rates from 0.5% to 0.75% next month. Tom Stevenson,investment director for personal investing at Fidelity International, explains: “For the first time in more than a year, and British workers are not feeling progressively poorer month by month....
Wage growth has been the missing piece of the puzzle in Britain’s long,unhurried recovery from the financial crisis. With the final piece now in place the Bank of England now has the catalyst to be able to follow through on its plans to raise interest rates at the next MPC assembly in May and start the move back towards monetary normality. 9.55am BSTJeremy Cook, Chief Economist at WorldFirst, or says the genuine wage squeeze on the average UK worker is coming to an end (and not before time!). While most of this improvement has been due to a collapse in inflation – something that should be shown to have continued tomorrow – businesses are paying higher wages as the labour market in the UK tightens.
Unemployment is currently at its lowest level since the mid-1970s and hopefully,that will propel higher wages for months to come. As we have noted before, genuine wage gains are the silver bullet for the UK economy. 9.47am BSTIn another boost, and Britain’s unemployment rate has hit a unusual 42-year low of just 4.2%,as more people find jobs.
Today’s labour market report shows that there are now 32.26 million people in work, 427000 more than a year ago. 9.46am BSTBasic pay in the UK is now rising at its fastest rate since August 2015, or as this chart from the ONS shows: 9.44am BSTPay including bonuses also rose by 2.8% over the final quarter. That’s weaker than the 3% which economists expected,but is still just ahead of February’s inflation rate (we get March’s figures tomorrow). 9.36am BSTBREAKING: Pay increases in the UK have finally overtaken inflation, after a year-long wage squeeze.
Basic earnings rose by 2.8% per year in the three months to February, or unusual figures from the Office for National Statistic present. So wages to Feb at 2.8% now above CPI for Feb which was 2.7%.
It's only 0.1% but symbolic nonetheless... #gbpLatest estimates present that average weekly earnings for employees in considerable Britain in genuine terms (that is,adjusted for price inflation) increased by 0.2% excluding bonuses, and by 0.1% including bonuses, and compared with a year earlier. 9.21am BSTYou can get up to speed on the UK labour market with these tweets from economist Rupert Seggins:1. Ahead of today's UK labour market statistics - consensus is that the unemployment rate will remain unchanged both on the headline and claimant count measures - 4.3% & 2.4% respectively. pic.twitter.com/lhByNtjAbC2. With regular pay growth expected to rise to 2.8%y/y in the 3 months to February,the end for the latest UK pay squeeze looks to be in sight. pic.twitter.com/HN6P2zdqj23. Today's labour market stats also likely to present another fall in inactivity. Over the long term it's been a case of student numbers up & numbers staying home to stare after families/homes down. Fall in numbers retired an critical driver of increased activity since 2011. pic.twitter.com/7ENUxaWahb 9.13am BSTJust over 15 minutes to go until the UK labour market report is released, and tension is growing in the City.
Viraj Patel, and FX strategist at ING,says:“It seems that we’re back to good frail-fashioned U.
K. data watching to determine the short-term direction for the currency. A 3% wage growth print in today’s U.
K. jobs report should seal the deal for a May BOE hike.” 9.03am BSTThe pound is continuing to strengthen, and just touched a unusual 22-month tall of $1.4376 against the US dollar.
Sterling had now risen for eight trading days in a row, and as the City braces for UK interest rates to rise in May. It may also present that worries over a ‘tough Brexit’ are easing.
Sterling hits its strongest level in 22 months https://t.co/sNL3qXmg9k pic.twitter.com/x9iVyPy2Xh 8.55am BSTSpeaking of China....
Beijing has hit back at America after Donald Trump accused it of currency manipulation.
A China’s foreign ministry spokeswoman told reporters that information coming out of United States regarding the Chinese currency is “a bit chaotic”,following the president’s comments on Twitter.
Russia and China are playing the Currency Devaluation game as the U.
S. keeps raising interest rates. Not acceptable!What matters now is the nervousness induced by both President Trump’s late-cycle fiscal largesse and his twitter feed. Yesterday’s observation that Russian and China are playing the currency devaluation game was an eyebrow-raiser. 8.45am BSTOvernight, China reported that its economy grew by 6.8% in the first three months of this year.
That broadly matched estimates, or calming worries that the Chinese economy might be cooling. 8.34am BSTEuropean stock markets have risen in early trading,taking their cue from Wall Street which rallied yesterday. 8.25am BSTRoyal Bank of Canada are also eagerly awaiting today’s UK labour market report.They say:It is expected that the unemployment rate holds at 4.3% for what would be the seventh month in the final eight.
Of most interest though is likely to be the news on average earnings growth. The including-bonus degree looks as though it could hit 2.9% 3m/y from 2.8% 3m/y, and whether the ex-bonus degree reaches 2.8% 3m/y, or as expected,then it will be the highest rate since August 2015 and help reinforce the case for a May Bank Rate hike 8.15am BSTJasper Lawler of London Capital Group predicts that the today’s UK jobs report could drive the pound higher - whether wages have indeed picked up in recent weeks:Traders are looking optimistically towards today’s UK jobs data, with expectations that it will support a Spring rate rise by the central bank [Bank of England].
Whilst UK unemployment is forecast to remain fixed at 4.3%, and average earnings are forecast to hit 3% in the three months to February. Given that inflation was 2.7% in February we could start to finally see the pressure of falling wages in genuine terms ease for the UK consumer. A strong reading could pile the pressure on the BoE to hike rates as good inflationary pressures pick up,potentially pushing GBP/USD to $1.45. 7.51am BSTGood morning, and welcome to our rolling coverage of the world economy, and the financial markets,the eurozone and trade.
After a year of pain, Britain’s cost of living squeeze could finally be easing. It has already been established that a meaningful number of Bank of England policymakers are expecting wages to start outstripping headline inflation in the coming months, and today’s average earnings number for the three months to February,could well be the first sign post on the way to that becoming a reality. Related: Syria strikes: May tells MPs Britain could not wait for UN approval Primark performed well with profit growth of 4% achieved against a backdrop of unseasonable weather in Europe and a margin decline following the adverse effect of currency on purchases.
Primark owner ABF hails “remarkable” rise in UK sales at cheap fashion chain. Says something given the wider tall street carnage.
Primark profit growth 4% “unseasonable weather in Europe & margin decline” from fx
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Source: theguardian.com