UK: Wage growth to move back into positive territory in early 2018 - Nomura

Sandeep Kanihama FXStreet Contributor

Analysts at Nomura point out that UK headline earnings growth stands at just over 2%, substantially lower than during previous monetary policy tightening cycles. However, with far weaker productivity growth now, earnings growth needs to be weaker in order to keep unit wage cost growth contained, they further adds.

Key Quotes

“Earnings growth may slow in this month’s report as a result of base effects (a strong June print drops out of the 3mma rate), but we expect it to generally improve in 2018 thanks to the tightening labour market. We forecast real wage growth to move back into positive territory in early 2018 as nominal wage growth rises and the rate of CPI inflation begins to slow.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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