As expected the BoE kept its powder dry following August’s rate hike. Meanwhile, the ECB remains on course to halt QE by year-end but tame inflation suggests a rate hike is some way off. In contrast, the Fed looks odds on to tighten policy further later this month.
The US economy is humming and wage pressures are building, keeping the Fed on track for another modest tightening in September. UK growth, however, remains lacklustre with manufacturing in the doldrums. A BoE rate hike appears a distant prospect.
A fresh Parliamentary term but the top agenda item is most definitely familiar. Brexit will again be all-consuming in the coming months, and far beyond.
The UK’s encouraging fiscal position provides Chancellor Hammond with more room for manoeuvre in his upcoming autumn statement.
Smile. Unemployment is 4% in the UK. Last seen when Derby County won the league, Harold Wilson was PM and ‘Make me smile (come up and see me)’ topped the charts. We’re practically German (3.4%). Employment rose 42k in Q2, full time jobs up 105k (so a fall in part time). True, the money’s not great. Average pay growth slipped to 2.4%y/y in June, barely above the preferred measure of inflation (2.3%). We’re treading water. Otherwise, it’s hard to fault the figures. Jobs are more secure and ¾ of the increase in jobs are high skilled. Many may be on holiday. But the labour market certainly isn’t.
UK growth rebounded in Q2, but outlook is clouded
The MPC voted unanimously to raise interest rates and the Fed looks like it is warming up for more of the same
The economic data is hinting at an impact from trade tensions. But it’s very modest, so far at least
The labour market continues to strengthen but wage growth refuses to escape its sluggish trajectory
Latest UK data points to a rebound in Q2 GDP after a lacklustre Q1.