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The Weekly Brief

Contributor Global Markets Insights Strategy Team

The UK labour market appears to be on relatively firm footing.

Last week, we saw the unemployment rate for August remain at a healthy 4.0%, while wage growth (excluding bonuses) over the year picked up to 3.1% – the highest since early 2009. This suggests that the domestic economy is becoming more robust, despite the current uncertainty surrounding the Brexit negotiations between the UK and the rest of the European Union. This increase in wage growth is good news for the consumer and could boost the growth outlook for the UK. If the UK agrees a deal that constitutes a relatively “soft Brexit”, then we could see the Bank of England raise rates faster than the market currently expects.

UK wage growth is picking up

% rate (LHS); % change year on year, three-month moving average (RHS)




Source: Bank of England, ONS, Thomson Reuters Datastream, J.P. Morgan Asset Management. Data as of 19 October 2018.

The Weekly Brief (22 October 2018)

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