UK: Brexit still priority No. 1 for the BoE despite stronger wages – ING
|James Smith, Developed Markets Economist at ING, points out that at 3.1%, UK average weekly earnings (ex. bonuses) are now the highest in almost a decade, following what has been a particularly strong summer for pay.
Key Quotes
“As a measure of just how good the momentum has been, the 3M/3M annualised change in wage growth now stands at 3.8%, noticeably higher than the 2.5-2.7% pace seen through the first half of 2018.”
“Given that wage growth has been central to the Bank of England's rate hike rationale, this trend is likely to keep them on their tightening track. However that is heavily contingent on Brexit, and we think the latest rise in uncertainty could see growth momentum slow once again as we head into the winter.”
“Even if the jobs numbers do hold up, there is still a risk that consumers begin to get more cautious if increased Brexit warnings from businesses see individuals start to reassess their job security.”
“So despite the better wage growth figures - that might otherwise see the Bank of England accelerate its tightening plans.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.