While Governor Carney may have saved some ink after yesterday’s UK inflation figures, the true test for the BoE’s hawkish assumptions over the coming months will be the labour market data – not least wage inflation dynamics, according to Viraj Patel, Research Analyst at ING.
“It may be a bit too premature to draw any tangible conclusions from today’s UK jobs report, but we will need to see wage growth moving in the right direction soon to justify any further UK rate curve steepening (assuming a smooth Brexit). Broadbent and Haldane also speaking. GBP/$ would move above 1.32 on a positive jobs report.”
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