Economists: November interest rate cut sees probable after wage lengthenth sluggishs
Several economists are foreseeing that today’s sluggishdown in pay lengthenth will encourage the Bank of England to cut interest rates at its next encountering in timely November.
Follothriveg the recents that standard wage lengthenth atraverse Great Britain sluggished to 4.9% in June to August, down from 5.1% a month ago, Ashley Webb, UK economist at Capital Economics, says:
The further drop in wage lengthenth in August, together with some signs that the labour labelet persistd to freen gradupartner, comprises further aid to expansivespread awaitations that the Bank of England will cut interest rates from 5.00% to 4.75% at the next policy encountering in November.
Luke Bartholomew, deputy chief economist at abrdn, says that “for now, another interest rate cut in November sees nailed on”, elucidateing:
“The labour labelet alert is improbable to shift the dial much on interest rate awaitations. Wage lengthenth persists to gradupartner mild, but still necessitates to come down further to be filledy stable with the Bank of England’s aim.
As flagged in the introduction, a cut in November was already seen as an 83% chance. This morning, it’s inched up towards 85%.
Monica George Michail, associate economist at NIESR, says:
Easing wage presbraves are aided by a notable drop in services sector pay lengthenth, which enrolled 3.6 per cent, down from an mediocre of 5.6 per cent in the first half of this year. This is selectimistic recents for inflation and might provide the Bank of England with incrmitigated confidence think abouting interest rate cuts”.
⚡️Our reaction to the tardyst #LabourMarket figures is out now ⚡️📉#UKeconomy #BankOfEngland @MichailMonica @_maxmosley @RoyalEconSoc pic.twitter.com/MRf9wZK6Qy
— National Institute of Economic and Social Research (@NIESRorg) October 15, 2024
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This time tomorrow we’ll be digesting the tardyst CPI inflation data, which will also have a meaningful impact on the Bank’s decision next month.
Kyle Chapman, FX labelets analyst at Ballinger Group, says:
“UK ex bonus wage lengthenth celderlyed from 5.1% to 4.9% in the three months to August and vacancies persistd to tight, while an unthinkworthy LFS unemployment figure fell aget to 4.0%.
“The headline here is that the trfinish in the labour labelet is still going in the right straightforwardion for 2% inflation, and that should aid a stable stream of rate cuts from the Bank of England. Labour insist is celderlying off and that is returning some sconciseage to the labelet, which is transporting down wage lengthenth, and that should filter thcdisorrowfulmireful into the all-transport inant services inflation figure over the coming months.
“The alert bravely won’t deter the BoE from cutting in November, although tomorrow’s CPI figures are probable to be much more meaningful. Policyoriginaters will consent the boiling unemployment figure with a pinch of salt – I’m not brave anybody is taking it solemnly right now given the volatility and its contrast with other indicators.”
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Follothriveg the recents that standard wage lengthenth atraverse Great Britain sluggished to 4.9% in June to August, down from 5.1% a month ago, Ashley Webb, UK economist at Capital Economics, says:
“,”elementId”:”c6ace9c0-8b8c-4ba2-abff-304a8e02a480″},{“_type”:”model.dotcomrfinishering.pageElements.BlockquoteBlockElement”,”html”:”
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The further drop in wage lengthenth in August, together with some signs that the labour labelet persistd to freen gradupartner, comprises further aid to expansivespread awaitations that the Bank of England will cut interest rates from 5.00% to 4.75% at the next policy encountering in November.
n
“,”elementId”:”eb260454-7c84-4f97-a873-430a51de6ffa”},{“_type”:”model.dotcomrfinishering.pageElements.TextBlockElement”,”html”:”
Luke Bartholomew, deputy chief economist at abrdn, says that “for now, another interest rate cut in November sees nailed on”, elucidateing:
“,”elementId”:”48fdfd0e-d6aa-48fc-9edb-e4393286ac8f”},{“_type”:”model.dotcomrfinishering.pageElements.BlockquoteBlockElement”,”html”:”
n
“The labour labelet alert is improbable to shift the dial much on interest rate awaitations. Wage lengthenth persists to gradupartner mild, but still necessitates to come down further to be filledy stable with the Bank of England’s aim.
n
“,”elementId”:”65c84f15-5662-490e-bd9b-5d1dbe2e9ebc”},{“_type”:”model.dotcomrfinishering.pageElements.TextBlockElement”,”html”:”
As flagged in the introduction, a cut in November was already seen as an 83% chance. This morning, it’s inched up towards 85%.
“,”elementId”:”d46a0017-626a-48bb-94c1-d94ad36b954c”},{“_type”:”model.dotcomrfinishering.pageElements.TextBlockElement”,”html”:”
Monica George Michail, associate economist at NIESR, says:
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n
Easing wage presbraves are aided by a notable drop in services sector pay lengthenth, which enrolled 3.6 per cent, down from an mediocre of 5.6 per cent in the first half of this year. This is selectimistic recents for inflation and might provide the Bank of England with incrmitigated confidence think abouting interest rate cuts”.
n
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⚡️Our reaction to the tardyst #LabourMarket figures is out now ⚡️📉#UKeconomy #BankOfEngland @MichailMonica @_maxmosley @RoyalEconSoc pic.twitter.com/MRf9wZK6Qy
— National Institute of Economic and Social Research (@NIESRorg) October 15, 2024
nn”},{“_type”:”model.dotcomrfinishering.pageElements.TextBlockElement”,”html”:”
This time tomorrow we’ll be digesting the tardyst CPI inflation data, which will also have a meaningful impact on the Bank’s decision next month.
“,”elementId”:”8780b9a9-8ac8-4b23-9036-2fbdabf76f6f”},{“_type”:”model.dotcomrfinishering.pageElements.TextBlockElement”,”html”:”
Kyle Chapman, FX labelets analyst at Ballinger Group, says:
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n
“UK ex bonus wage lengthenth celderlyed from 5.1% to 4.9% in the three months to August and vacancies persistd to tight, while an unthinkworthy LFS unemployment figure fell aget to 4.0%.
n
“The headline here is that the trfinish in the labour labelet is still going in the right straightforwardion for 2% inflation, and that should aid a stable stream of rate cuts from the Bank of England. Labour insist is celderlying off and that is returning some sconciseage to the labelet, which is transporting down wage lengthenth, and that should filter thcdisorrowfulmireful into the all-transport inant services inflation figure over the coming months.
n
“The alert bravely won’t deter the BoE from cutting in November, although tomorrow’s CPI figures are probable to be much more meaningful. Policyoriginaters will consent the boiling unemployment figure with a pinch of salt – I’m not brave anybody is taking it solemnly right now given the volatility and its contrast with other indicators.”
n
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In June to August, the highest employment rate in the UK was in the South West (78.8%) and the lowest was in Wales (69.8%), the Office for National Statistics alerts.
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The highest unemployment rate was in the North East (5.6%) and the lowest was in Northern Ireland (1.9%).
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The highest economic inactivity rate was in Northern Ireland (28.5%) and the lowest was in the South West (18.6%).
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Companies are continuing to cut their vacancies – a sign that insist for labour is feebleening, or of economic unbravety.
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Today’s jobs roert shows that vacancies in the UK decrmitigated by 34,000 in July to September, to 841,000.
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That’s the 27th drop in a row, as the hiring boom follothriveg the Covid-19 lockdowns persists to fade.
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However, vacancies are still above pre-pandemic levels.
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There were 841,000 job vacancies in July to September 2024, down 34,000 on the previous three months, although still 45,000 above pre #COVID19 levels.
Read more ➡️ https://t.co/EGcFFreQEV pic.twitter.com/W8FSByO9Lj
— Office for National Statistics (ONS) (@ONS) October 15, 2024
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The UK’s unemployment rate has drdisclose to its lowest since the commence of this year, today’s labour force alert shows.
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The josanctify rate has dipped to 4% in the June to August quarter, its lowest since the three months to January.
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The number of people unemployed dropped to 1.386m, a drop of 141,000 in the quarter.
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In contrast, the employment rate rose over the quarter, to 75%, up from 74.8% last month.
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The economic inactivity rate (those neither laboring nor seeing for labor), sluggished to 21.8% from 21.9%.
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Good morning, and receive to our rolling coverage of business, the financial labelets, and the world economy.
“,”elementId”:”6b68c1ea-93b6-4b91-8033-06db8ccea955″},{“_type”:”model.dotcomrfinishering.pageElements.TextBlockElement”,”html”:”
Wage lengthenth atraverse Great Britain has sluggished, as companies cut the number of laborers on their payrolls.
“,”elementId”:”096ffa23-ef55-4d50-a2e8-a21847db315c”},{“_type”:”model.dotcomrfinishering.pageElements.TextBlockElement”,”html”:”
Data fair liberated by the Office for National Statistics shows that standard pay (excluding bonemploys) rose by 4.9% in June-August, down from 5.1% enrolled in May-July.
“,”elementId”:”8b1a89c2-bb2a-4bb4-8baa-34b03de5cb18″},{“_type”:”model.dotcomrfinishering.pageElements.TextBlockElement”,”html”:”
Total getings (including bonemploys), rose by 3.8% in the quarter, aget sluggisher than the 4.0% enrolled a month ago. This lengthenth rate is impacted by the one-off bonus payments made to NHS and civil service staff in June, July and August 2023, the ONS points out.
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Pay excluding bonemploys grew by 4.9% in the year to June to August 2024; including bonemploys it was up 3.8%, though this comparison is impacted by last year’s NHS and civil service one-off payments.
Read more ➡️ https://t.co/jON4AZbdU1 https://t.co/zFLbXW7lAC pic.twitter.com/OvkjVOBxMb
— Office for National Statistics (ONS) (@ONS) October 15, 2024
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This data is seally watched by the financial labelets, as it will sway how speedyly the Bank of England can drop UK interest rates.
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Last night, a rate cut – from 5% to 4.75% – is seen as an 83% chance by the labelets.
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Although wage lengthenth has sluggished, getings are still rising speedyer than inflation.
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Using the CPI inflation meabrave, standard authentic pay rose by 2.6% on the year, drop than the previous three-month period when it was 3.0%. Total authentic pay rose by 1.7% on the year.
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The ONS also evaluates that the number of employees on company payrolls fell by 35,000 in August, and by another 15,000 in September (that’s an timely evaluate, though).
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The editd evaluate of employees on the payroll in August 2024 was down 35,000 on the month. The provisional evaluate for September 2024 was down another 15,000.
Read more ➡️ https://t.co/efBXC3W153 pic.twitter.com/0AxTg5jSM9
— Office for National Statistics (ONS) (@ONS) October 15, 2024
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David Freeman, head of the ONS Labour Market and Hoemployhelderly Division, says:
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“Pay lengthenth sluggished aget, with last year’s one-off payments made to many accessible sector laborers continuing to impact the figures for total pay. However, getings persist to elevate speedyer than inflation.
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“Over the last three months the number of people on payrolls has stayed expansively flat. The Labour Force Survey shows a branch offent picture and we would propose alert when expounding alters in these data while we persist to better survey responses.
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“Vacancies have drdisclose once more, with most industries seeing a drop on the quarter. However, the total still remains a little above its pre-pandemic level.”
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The agfinisha
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7am BST: UK labour labelet alert
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10am BST: ZEW economic sentiment index for Germany
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10am IEA monthly oil Market Report
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1.30pm NY Empire State manufacturing Index
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2pm BST: IMF commences rerenting methodical chapters of its Global Financial Stability Report
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2.30pm BST: World Bank to liberate alert on pcleary and prosperity
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Key events
Wages in Britain’s accessible sector grew speedyer than in the braveial sector over the summer.
Today’s getings data shows that mediocre standard getings (ex-bonemploys) in the accessible sector grew by 5.2% in June-August, down from 5.7% a month ago.
In the braveial sector, standard pay rose by 4.8% over the period, down from 5%, and the lowest rate since the three months to April 2022.
However, if you comprise bonemploys… then total pay rose by 4.7% for braveial sector laborers but fair 0.1% over the last year in the braveial sector (becaemploy we’ve caught up with the bonemploys paid to NHS and civil service staff in summer 2023).
Economists: November interest rate cut sees probable after wage lengthenth sluggishs
Several economists are foreseeing that today’s sluggishdown in pay lengthenth will encourage the Bank of England to cut interest rates at its next encountering in timely November.
Follothriveg the recents that standard wage lengthenth atraverse Great Britain sluggished to 4.9% in June to August, down from 5.1% a month ago, Ashley Webb, UK economist at Capital Economics, says:
The further drop in wage lengthenth in August, together with some signs that the labour labelet persistd to freen gradupartner, comprises further aid to expansivespread awaitations that the Bank of England will cut interest rates from 5.00% to 4.75% at the next policy encountering in November.
Luke Bartholomew, deputy chief economist at abrdn, says that “for now, another interest rate cut in November sees nailed on”, elucidateing:
“The labour labelet alert is improbable to shift the dial much on interest rate awaitations. Wage lengthenth persists to gradupartner mild, but still necessitates to come down further to be filledy stable with the Bank of England’s aim.
As flagged in the introduction, a cut in November was already seen as an 83% chance. This morning, it’s inched up towards 85%.
Monica George Michail, associate economist at NIESR, says:
Easing wage presbraves are aided by a notable drop in services sector pay lengthenth, which enrolled 3.6 per cent, down from an mediocre of 5.6 per cent in the first half of this year. This is selectimistic recents for inflation and might provide the Bank of England with incrmitigated confidence think abouting interest rate cuts”.
⚡️Our reaction to the tardyst #LabourMarket figures is out now ⚡️📉#UKeconomy #BankOfEngland @MichailMonica @_maxmosley @RoyalEconSoc pic.twitter.com/MRf9wZK6Qy
— National Institute of Economic and Social Research (@NIESRorg) October 15, 2024
nn”}}”/>
This time tomorrow we’ll be digesting the tardyst CPI inflation data, which will also have a meaningful impact on the Bank’s decision next month.
Kyle Chapman, FX labelets analyst at Ballinger Group, says:
“UK ex bonus wage lengthenth celderlyed from 5.1% to 4.9% in the three months to August and vacancies persistd to tight, while an unthinkworthy LFS unemployment figure fell aget to 4.0%.
“The headline here is that the trfinish in the labour labelet is still going in the right straightforwardion for 2% inflation, and that should aid a stable stream of rate cuts from the Bank of England. Labour insist is celderlying off and that is returning some sconciseage to the labelet, which is transporting down wage lengthenth, and that should filter thcdisorrowfulmireful into the all-transport inant services inflation figure over the coming months.
“The alert bravely won’t deter the BoE from cutting in November, although tomorrow’s CPI figures are probable to be much more meaningful. Policyoriginaters will consent the boiling unemployment figure with a pinch of salt – I’m not brave anybody is taking it solemnly right now given the volatility and its contrast with other indicators.”
The regional unemployment picture
In June to August, the highest employment rate in the UK was in the South West (78.8%) and the lowest was in Wales (69.8%), the Office for National Statistics alerts.
The highest unemployment rate was in the North East (5.6%) and the lowest was in Northern Ireland (1.9%).
The highest economic inactivity rate was in Northern Ireland (28.5%) and the lowest was in the South West (18.6%).
Vacancies drop aget
Companies are continuing to cut their vacancies – a sign that insist for labour is feebleening, or of economic unbravety.
Today’s jobs roert shows that vacancies in the UK decrmitigated by 34,000 in July to September, to 841,000.
That’s the 27th drop in a row, as the hiring boom follothriveg the Covid-19 lockdowns persists to fade.
However, vacancies are still above pre-pandemic levels.
There were 841,000 job vacancies in July to September 2024, down 34,000 on the previous three months, although still 45,000 above pre #COVID19 levels.
Read more ➡️ https://t.co/EGcFFreQEV pic.twitter.com/W8FSByO9Lj
— Office for National Statistics (ONS) (@ONS) October 15, 2024
nn”}}”/>
UK unemployment rate drops to 4%
The UK’s unemployment rate has drdisclose to its lowest since the commence of this year, today’s labour force alert shows.
The josanctify rate has dipped to 4% in the June to August quarter, its lowest since the three months to January.
The number of people unemployed dropped to 1.386m, a drop of 141,000 in the quarter.
In contrast, the employment rate rose over the quarter, to 75%, up from 74.8% last month.
The economic inactivity rate (those neither laboring nor seeing for labor), sluggished to 21.8% from 21.9%.
Introduction: UK wage lengthenth sluggishs
Good morning, and receive to our rolling coverage of business, the financial labelets, and the world economy.
Wage lengthenth atraverse Great Britain has sluggished, as companies cut the number of laborers on their payrolls.
Data fair liberated by the Office for National Statistics shows that standard pay (excluding bonemploys) rose by 4.9% in June-August, down from 5.1% enrolled in May-July.
Total getings (including bonemploys), rose by 3.8% in the quarter, aget sluggisher than the 4.0% enrolled a month ago. This lengthenth rate is impacted by the one-off bonus payments made to NHS and civil service staff in June, July and August 2023, the ONS points out.
Pay excluding bonemploys grew by 4.9% in the year to June to August 2024; including bonemploys it was up 3.8%, though this comparison is impacted by last year’s NHS and civil service one-off payments.
Read more ➡️ https://t.co/jON4AZbdU1 https://t.co/zFLbXW7lAC pic.twitter.com/OvkjVOBxMb
— Office for National Statistics (ONS) (@ONS) October 15, 2024
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This data is seally watched by the financial labelets, as it will sway how speedyly the Bank of England can drop UK interest rates.
Last night, a rate cut – from 5% to 4.75% – is seen as an 83% chance by the labelets.
Although wage lengthenth has sluggished, getings are still rising speedyer than inflation.
Using the CPI inflation meabrave, standard authentic pay rose by 2.6% on the year, drop than the previous three-month period when it was 3.0%. Total authentic pay rose by 1.7% on the year.
The ONS also evaluates that the number of employees on company payrolls fell by 35,000 in August, and by another 15,000 in September (that’s an timely evaluate, though).
The editd evaluate of employees on the payroll in August 2024 was down 35,000 on the month. The provisional evaluate for September 2024 was down another 15,000.
Read more ➡️ https://t.co/efBXC3W153 pic.twitter.com/0AxTg5jSM9
— Office for National Statistics (ONS) (@ONS) October 15, 2024
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David Freeman, head of the ONS Labour Market and Hoemployhelderly Division, says:
“Pay lengthenth sluggished aget, with last year’s one-off payments made to many accessible sector laborers continuing to impact the figures for total pay. However, getings persist to elevate speedyer than inflation.
“Over the last three months the number of people on payrolls has stayed expansively flat. The Labour Force Survey shows a branch offent picture and we would propose alert when expounding alters in these data while we persist to better survey responses.
“Vacancies have drdisclose once more, with most industries seeing a drop on the quarter. However, the total still remains a little above its pre-pandemic level.”
The agfinisha
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7am BST: UK labour labelet alert
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10am BST: ZEW economic sentiment index for Germany
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10am IEA monthly oil Market Report
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1.30pm NY Empire State manufacturing Index
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2pm BST: IMF commences rerenting methodical chapters of its Global Financial Stability Report
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2.30pm BST: World Bank to liberate alert on pcleary and prosperity
