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UK employment data slightly better than expected - ING

FXStreet (Łódź) - James Knightley from ING comments on the UK labor report released on Wednesday and showing a decrease in the unemployment rate from 6.2% to 6%, the lowest since October 2008.

Key quotes

"The number of people actually claiming unemployment benefit fell by 18,600, to leave the claimant count unemployment rate at 2.8%."

"The details show that employment levels rose 46,000 in the three months to August versus 30,000 expected while the number of people classifying themselves as unemployed fell by 154,000, taking the total number of people classified as unemployed below 2 million (again, the best figure since October 2008)."

"There was also some modestly better news on wages with total wage rates picking up to 0.7%YoY from 0.6% while excluding bonuses, pay rates rose 0.9%YoY from 0.8%. With the Low Pay Commission estimating that a million workers will benefit from this month’s 3% hike in the national minimum wage we may see wage growth accelerate in the months ahead."

"Indeed, it could be the catalyst for broader pay rises, particularly with the pool of available labour continuing to shrink and labour market turnover picking up. As a result we could soon see firms becoming more concerned about staff retention in this environment, thereby making them more amenable to the idea of increasing pay."

"In any case, with a supermarket price war and lower petrol prices making the pound in peoples’ pockets go further and with consumer confidence back up at pre-crisis levels it could be a good 4Q for consumer spending."

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