U.K. Unemployment Falls to New 43-Year Low But Pay Growth Slows
Tuesday, 14 August 2018 16:16 WIB |
ECONOMY |Ekonomi inggrisUK Unemployment
U.K. unemployment dropped to a new 43-year low in the three months through June but the pace of wage growth eased.
The jobless rate stood at 4 percent, the least since February 1975, the Office for National Statistics said on Tuesday. Economists had expected it to stay at 4.2 percent.
The decline helps to explain why the Bank of England increased interest rates this month. Policy makers believe inflationary pressures are building in the labor market as skill shortages force some employers to raise wages to attract and retain staff.
There was little sign of overall wages taking off in the latest data -- pay growth slowed to a nine-month low of 2.4 percent between April and June -- but the BOE sees a pickup toward 3.5 percent this year.
For policy, much depends on productivity. Without a significant improvement, firms may find their profit margins coming under pressure and increase prices to compensate. Flash figures for the second quarter show output per hour rose 0.4 percent, leaving productivity up just 1.5 percent on the year.
The pound initially climbed after the data, before paring gains and trading 0.2 percent higher at $1.2790 as of 9:41 a.m. in London. The market-implied probability of another BOE rate hike in May 2019 edged up to about 45 percent, from 39 percent on Monday.
Source : Bloomberg