December’s labour market data showed that, despite an easing in labour demand, labour market conditions stayed tight and the market continued to support strong wage growth. The Bank of England will be increasingly concerned about the persistence of domestic inflationary pressures as private sector wage growth (excluding bonuses) exceeded its forecast. This supports our view that the Bank of England will have to raise interest rates from 4.00% now to a peak of 4.50% in the coming months.
UK Drop-In (Wednesday 15th Feb.): Join us shortly after the January CPI release for a briefing on the UK macro outlook, including why we expect the biggest wave of business insolvencies since the GFC. Register now.
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