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UK: Positive vibes in the air - ING

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 22, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Delhi) – James Knightley, Senior Economist at ING, suggests that the UK labour market looks in good shape, but the Bank of England is more concerned about external headwinds and the lack of inflation.

    Key Quotes

    “Recent UK labour data was very decent with employment growth in the 3M to November rising 267k and the unemployment rate falling to 5.1% – the lowest in ten years. Both figures were better than the 235k and 5.2% consensus predictions. However, wage growth did slow close to expectations (ex-bonus the 3M average is now 1.9% YoY, although the single month reading did rise to 2.1% from 1.6%). Consequently, it was an encouraging report that should keep consumer confidence and spending running at healthy levels.

    However, with BoE Governor Mark Carney suggesting there is little appetite for a rate hike any time soon and with the prospect of a Brexit vote set to weigh on activity, it looks as though November remains the earliest possible opportunity for a rate rise. This remains our house view, but the further oil prices fall the greater the scope for the BoE to leave policy rates lower for longer.”
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