Labour market uplift gives relief to Carney and the Bank of England
The pendulum of UK Monetary Policy swung back towards the positive end this morning as the UK Unemployment Rate dropped again to 4.4% with a key increase in wages above 2.0%.
After the Inflation rate held steady yesterday at 2.6%, the gap between that and wages narrowed, something which has been lacking on the home-front in recent times. Despite Inflation still being on a high trajectory and notably a huge concern for Governor Carney, the stand-still rate against a rise in wages is a positive step as well as an ever-decreasing headline rate of Unemployment. For the average consumer, this is only good news as purchasing power takes a step in the right direction which with Brexit headwinds is a nice, albeit temporary, relief for UK economics. Market participants will hope for clearer direction now from the Central Bank on the future rate path, as fears of rising Inflation should diminish a little and give Sterling some support.
Alex Lydall quoted in Market Watch