U.K. employment regains momentum in December, jobless rate unchanged at 4.3 pct

The U.K. labor market report for the month of November released today implies that employment regained its momentum into year-end, recording an impressive 102k rise in the three months to November. In spite of the ongoing uncertainties in the U.K’s longer-term economic outlook, the latest figures imply that near-term economic trends continue to be strong.

Unemployment declined further in the month, but not enough to push the jobless rate further, which remained at 4.3 percent. Such a jobless rate has historically indicated a tight labor market and the possibility of a rise in wage growth. Some signs of this were clear in the latest report. While overall average weekly pay remained the same at an annual rate of 2.5 percent, regular pay growth accelerated to a rate of 2.4 percent compared with 2.3 percent in the earlier report.

Surveys of hiring intentions and, more widely of, economic activity imply that demand for labor should be solid in the months ahead. Alongside, evidence from pay settlement reports, these factors imply that wage growth should show additional signs of acceleration, noted Lloyds Bank in a research report.

“While we expect an ongoing recovery in wage growth to support one rate hike from the Bank of England this year, a more meaningful rise in pay would likely be needed to elicit a more aggressive response”, added Lloyds Bank.

At 13:00 GMT the FxWirePro's Hourly Strength Index of British Pound was highly bullish 151.209, while the FxWirePro's Hourly Strength Index of US Dollar was bearish at -97.6628. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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