United Kingdom: Wage momentum complicates the BoE outlook - Nomura
Nomura’s Josie Anderson, George Buckley and Andrzej Szczepaniak say the latest UK labour data show strong private sector pay but softer employment, with payrolls falling and vacancies at their lowest since early 2021.
UK wage data reveals strong private sector pay, but falling employment figures. Nomura analysts note that while payrolls declined more than expected, they expect the Bank of England to maintain rates unchanged this week. However, persistent wage growth and higher energy prices could prompt future hikes. Private sector regular pay increased by 0.3% month-over-month in July, exceeding forecasts. Policymakers may become concerned about second-round inflation effects if this trend continues.
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