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...Sterling slid against the dollar after wage growth in the UK slowed slightly more than expected, supporting expectations that the Bank of England will deliver multiple interest rate cuts this year....
...UK wage growth continued to slow in the three months to January, confirming the Bank of England’s view that inflationary pressures were easing in the economy....
...Investors pushed back their expectations on the timing of Bank of England rate cuts and sterling rose after stronger than expected wage data added pressure on the central bank in its battle to cool rising...
...Mary McDougall...
...Rate-setters are watching wages closely because they believe it will be harder to return inflation to the 2 per cent target if companies pass higher wage bills on to consumers....
...Many economists expect growth to improve as wages rise faster than inflation and mortgage rates fall from last year’s peak....
...“It will take a lot of very bad inflation and wage data for them not to do that now.”...
...The central bank is also keenly watching wage increases and other labour market data....
...The inflation print comes as welcome news for the Bank of England after government data on Tuesday showed UK wage growth proved stronger than expected in the three months to December....
...Bailey also said the current market pricing for interest rates was not “unreasonable” and that inflation had “come down very rapidly”, but he wanted to see more progress on wage growth and price pressures...
...Sterling held steady against the dollar after UK wages rose by slightly less than expected ahead of the Bank of England’s monetary policy committee meeting on Thursday....
...“Commitments in the run-up to the election to boost fiscal stimulus and wage a trade war could create similar bouts of volatility, higher rates and wider credit spreads,” he said....
...The moves come in a volatile week for interest rate pricing as traders had dialled back rate-cut hopes on Tuesday after UK wage growth and US inflation both eased by less than expected....
...They also point to seven months of real wage growth and the effects of Hunt’s cuts to national insurance — worth £900 a year to the average worker — feeding through into pay packets....
...“It’s a distinct change in tone from the messaging last month and weaker wage data today [Friday] supports that dovish stance.” On Friday a trio of ECB rate-setters boosted that view....
...Holger Schmieding, economist at Berenberg, said European inflation was “structurally higher than in the past” and the impact of demographic change — higher wage demands and fewer workers — and the ongoing...
...“Given the uncertain message coming from the data with UK inflation remaining the highest among major economies and wages still growing at around 6.5 per cent year on year, a hawkish bias from the BoE is...
...Sterling fell on Tuesday after softer than expected UK wage data prompted traders in swaps markets to slightly increase bets on the first Bank of England interest rate cut being delivered in May....
...Policymakers have shifted their focus to medium-term inflation risks, highlighting the threats from a tight labour market, robust wage growth and expansionary fiscal policy....
...The labour department’s employment cost index, which tracks wages and benefits paid by private and public-sector employers, rose 0.9 per cent between September and December....
...It also follows the release of UK wage data showing pay growth has not slowed as much as analysts had expected — a lingering concern for the BoE, which believes inflation could remain “sticky” if employers...
...Gilts rallied on Tuesday, pushing yields lower after softer than expected UK wages data eased pressure on the Bank of England in its battle against inflation....
...Additional reporting by Mary McDougall...
...UK wages grew at the fastest pace on record in the three months to July, despite a weaker jobs market in which unemployment rose and hiring slowed, official data showed on Tuesday....
...But the BoE warned that core inflation — which strips out food and energy — remained higher at 5.7 per cent than in the US and euro area, and that services price inflation is also more elevated, as is wage...
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