UK unemployment rate ticked down to a new generational low of 4.5% - BBH

UK labor report had something for everyone as the unemployment rate ticked down to a new generational low of 4.5% from 4.6%, notes the analysis team at BBH.  

Key Quotes

“The three-month change in employment rose to 175k.  The median forecast was for the 120k increase.  The claimant count increased by 6k after a 7.5k increase in May.”

“Even earnings were mixed.  At the headline level, they rose 1.8% in the three-months year-over-year period, down from 2.1% in April and in line with expectations.  Excluding bonuses, the pace was a bit stronger than expected at 2.0%, up from a revised 1.8% in April (from 1.7%).”

“Sterling recovered fully from its earlier losses in response to the employment data.  The earlier losses had knocked sterling to almost $1.2810, extending yesterday's drop.  Although BOE Deputy Governor Broadbent did not address his monetary policy views directly in yesterday's speech, in a newspaper interview, he did and he was clear.  He is not ready to endorse a rate hike, though recognizes pressures may be building.  Broadbent seemed particularly sensitive to the high degree of uncertainty or what he called "imponderables."  

“The euro made a new high for the year against sterling today near GBP0.8950 but has reversed course and is returned to GBP0.8900 in late European morning turnover.  Given yesterday's big outside day and the follow through gains earlier, we suspect participants will be more inclined to buy the euro on dips.  A move to GBP0.8860-GBP0.8880 may be seen as such a dip.”