Investment Clock insights

Solid labour market data seal the deal for a May rate hike


Ian Kernohan

17 April 2018

This was a solid set of labour market data and conditions remain far stronger than consensus expectations at the time of the Brexit referendum.  
Total employment rose by 55,000 in the three months to February, while unemployment fell by 16,000 over the same period, and is now 136,000 lower than a year ago. The unemployment rate was 4.2%, down from 4.7% for a year earlier and the lowest since 1975. Average weekly earnings rose by 2.8% year on year.
As inflation falls further, real wage growth should return and we expect the Bank of England to increase interest rates again next month.

This was a solid set of labour market data and conditions remain far stronger than consensus expectations at the time of the Brexit referendum.  

Total employment rose by 55,000 in the three months to February, while unemployment fell by 16,000 over the same period, and is now 136,000 lower than a year ago. The unemployment rate was 4.2%, down from 4.7% for a year earlier and the lowest since 1975. Average weekly earnings rose by 2.8% year on year.

As inflation falls further, real wage growth should return and we expect the Bank of England to increase interest rates again next month.

Past performance is no guide to the future. 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.