U.K. labor market regained momentum. The latest U.K. labor market figures indicated that near-term economic trends continued to stay strong, in spite of ongoing uncertainties in the longer-term economic outlook.
Growth in employment regained some momentum, recording an above expectation rise of 79k in the three months to October. The rise also indicated a change in the composition of jobs created with the number of part-time jobs declining by 31k; however, the number of full-time jobs rising by 110k, indicating to a rise in the number of hours worked overall in the U.K. economy, noted Lloyds Bank in a research report.
Some rise in unemployment was also seen, recording a rise of 20k over the same period but not sufficient to change the jobless rate, which has remained at 4.1 percent. This is close to the 43-year low of 4 percent recorded over the summer months. Such a jobless rate has historically showed a tight labor market. Further signs of this were clear in the latest report. The regular and headline measures of pay accelerated to 3.3 percent in the latest report.
Surveys of hiring intentions imply that demand for labor should continue to keep the labor market tight in the months ahead, said Lloyds Bank. Furthermore, evidence from pay settlement reports, alongside recent announcements from several retailers of rises in minimum pay levels, implies that wage growth is expected to accelerate further.
Along with an expected easing in the pace of inflation, these influences should continue to give a supportive backdrop for the U.K. consumer in to next year, while also suggesting an increase in domestic inflationary pressures.
“We expect an ongoing rise in wage growth to support one rate hike from the Bank of England in 2019, but a more meaningful rise in pay would likely require a more aggressive response from the Monetary Policy Committee”, added Lloyds Bank.
At 12:00 GMT the FxWirePro's Hourly Strength Index of British Pound was highly bearish at -142.862, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -38.0509. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
