FXStreet (Edinburgh) – James Knightley, Analyst at ING Bank, has assessed the recent figures in the UK labour market.
Key Quotes
“The UK labour data is surprisingly weak with employment falling 67,000 in the March-May period. The unemployment rate rose to 5.6% from 5.5%, while the separate survey calculating the number of people claiming out of work benefits rose 7,000 in June”.
“This is the first fall in employment since March 2013 and the first rise in the unemployment rate since December 2013. At the margin it may temper rate hike expectations following recent mildly hawkish BoE comments and take the steam out of sterling’s recent strong run”.
“That said, there are positive in the report with average earnings continuing to rise”.
“With Consumer Price Inflation at 0%, households are seeing their spending power increase, which is good news for confidence and spending”.
“Moreover, with the UK economy dominated by the service sector and labour being the main cost driver for the industry, it does suggest that medium term inflation pressures will continue to build”.
(Market News Provided by FXstreet)