Investment Clock insights

No obvious impact on labour market from EU exit vote


Ian Kernohan

18 January 2017

Today's UK labour market reports show that employment fell by 9,000 in the three months to November 2016, however the unemployment rate remained flat at 4.8%, showing no obvious impact from the vote to leave the EU last summer.  The Bank of England is particularly concerned about any signs of significant wage pressures, especially at a time when headline inflation is also picking up. 
However, with the most recent data showing that core average earnings growth continues to look fairly modest at 2.7%, the pressing issue is that real household income growth will be squeezed as headline inflation rises. In the absence of any serious underlying inflationary pressures, this is of greater concern.

Today's UK labour market reports show that employment fell by 9,000 in the three months to November 2016, however the unemployment rate remained flat at 4.8%, showing no obvious impact from the vote to leave the EU last summer.  The Bank of England is particularly concerned about any signs of significant wage pressures, especially at a time when headline inflation is also picking up. 

However, with the most recent data showing that core average earnings growth continues to look fairly modest at 2.7%, the pressing issue is that real household income growth will be squeezed as headline inflation rises. In the absence of any serious underlying inflationary pressures, this is of greater concern.

The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.