England`s Wage Growth
Publish Date :
2019/07/16 - 11:48
Economist Jim Smith, ING, states that at 3.6%, UK wage growth has become another crisis after other crises and is one of the factors behind the bullish trend for the Bank of England.
They say: "It is a key element in the recent signal of policymakers, if Brexit is soft, the interest rates may need to increase.
From a structural point of view, these signs suggest that the rising factor in wages is likely to be sustained. The recent increase in wage payments is linked to a lack of diversity in various industries (most notably in construction and IT). The vacancy rate, while still high, declined for the fifth consecutive month, while employment growth was lower. Changes in season-on-season ratio have dropped to 28,000 in recent months.
We think wage growth will continue to act as a bullish factor for the Bank of England. We also think it's too early for Britain to cut interest rates.