UK jobs data

British jobs data came out stronger than expected, supporting the British currency and helping the FTSE100 partially counter the market pressure from the start of the day on Tuesday.

Wage growth has been slower than expected, adding 4.9% in the last three months to the same period a year earlier, vs expected 4.6%. The rate of wage growth is declining due to a move away from the low base effect, and current data leaves earnings above inflation (4.2%). This is a noticeably stronger performance than in Europe and the USA, where wages are not keeping up with price rises.

UK jobs data - 1

Furthermore, the number of jobless claims has fallen for the ninth month in a row, although there are still 722K more claims than before the pandemic hit in March 2020.

On balance, strong wage growth and a recovery in employment give the Bank of England more room to tighten monetary policy. Later this week, the BoE will likely give transparent hints of an imminent rate hike, further supporting the contrast of the pound against the euro.

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Alex Kuptsikevich

Financial market professional with 16-years' experience and Senior financial analyst at FxPro. Author of daily reviews on the impact of economic events with comments regularly featured in top international and Russian media. Covers fundamental analysis, global markets, foreign exchange market, gold, oil, cryptocurrencies.

Alex Kuptsikevich is a regular contributor to both digital and print media including CNBC, Forbes, Reuters, MarketWatch, BBC and Coindesk.