19 Feb 2015
Stellar UK earnings growth GBP supportive – BTMU
FXStreet (Barcelona) - Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, reviews yesterday’s employment data release in the UK, further expecting the strong earnings growth to continue this year and boost personal consumption and support a stronger GBP especially against the EUR.
Key Quotes
“Employment increased solidly by 103k in the three months to the end of December. The unemployment rate declined by a further 0.1 percentage point to 5.7% moving closer to the BoE’s estimates of the equilibrium rate of unemployment at 5.0%.”
“Tightening labour market conditions also encouraged a sharp acceleration in earnings growth in the second half of last year. The annual rate of weekly earnings growth (3-month average) accelerated to 2.1% in December.”
“The performance of earnings growth was a story of two halves in 2014. Weekly earnings growth accelerated sharply by an annualized rate of 4.6% in the second half of last year after very weak annualized growth of just 0.2% in the first half.”
“We are more confident now that stronger earnings growth will continue this year which has boosted our confidence that economic growth will remain robust in the UK.”
“It is also possible that the slowdown in growth towards the end of last year will be revised away over time.”
“Earnings growth is now running well ahead of inflation which is providing a significant boost to real disposable incomes and thereby personal consumption growth.”
“The continuation of strong cyclical momentum in the UK should remain supportive for a stronger pound especially against the euro.”
Key Quotes
“Employment increased solidly by 103k in the three months to the end of December. The unemployment rate declined by a further 0.1 percentage point to 5.7% moving closer to the BoE’s estimates of the equilibrium rate of unemployment at 5.0%.”
“Tightening labour market conditions also encouraged a sharp acceleration in earnings growth in the second half of last year. The annual rate of weekly earnings growth (3-month average) accelerated to 2.1% in December.”
“The performance of earnings growth was a story of two halves in 2014. Weekly earnings growth accelerated sharply by an annualized rate of 4.6% in the second half of last year after very weak annualized growth of just 0.2% in the first half.”
“We are more confident now that stronger earnings growth will continue this year which has boosted our confidence that economic growth will remain robust in the UK.”
“It is also possible that the slowdown in growth towards the end of last year will be revised away over time.”
“Earnings growth is now running well ahead of inflation which is providing a significant boost to real disposable incomes and thereby personal consumption growth.”
“The continuation of strong cyclical momentum in the UK should remain supportive for a stronger pound especially against the euro.”