UK labour market figures for the 3 months through November have come in slightly ahead of expectations. Unemployment has remained steady at 4.3% but the big news is that average earnings are still at 2.5% y/y. With the unemployment rate at 30-year lows, the average earnings figures has more weight for markets. Inflation fell last month so wage growth only needs to hold steady to reduce the pinch on consumer pockets. Although UK jobless claims rose more than expected at 8.6k, employment also rose 102k which handily beat expectations.
GBP/USD has hit a new post-Brexit high of 1.41 after the data. The relentless rise in Sterling, which has seen it jump over 3% in the last 10 days is looking durable. The good news for the economy is that more people are working with rising wages despite any uncertainty associated with leaving the European Union. Lord Jim O’Neil looks vindicated so far in his belief that strong domestic and global growth will overcome Brexit headwinds.
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