The latest batch of data brought some signs of a softening in labour demand, but with the unemployment rate having fallen to pre-COVID levels, job vacancies at a record high and wage growth rising, the labour market is very tight. So, even though real wages are now falling and will decline further, we still expect the Bank of England to raise interest rates from 0.75% to 1.00% on 5th May and to 2.00% next year.
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