| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 06:00 | United Kingdom | Average Earnings, 3m/y | February | 5.6% | 5.5% | 5.6% |
| 06:00 | United Kingdom | ILO Unemployment Rate | February | 3.9% | 4.0% | 4.2% |
| 06:00 | United Kingdom | Claimant count | March | 4.1 | 17.2 | 10.9 |
| 09:00 | Eurozone | ZEW Economic Sentiment | April | 33.5 | 37.2 | 43.9 |
| 09:00 | Germany | ZEW Survey - Economic Sentiment | April | 31.7 | 35.1 | 42.9 |
GBP firms against most of the other major currencies in the European session on Tuesday as investors responded to the UK’s labour market data, which revealed a stickiness of wage growth in the three months through February despite an unexpected climb in unemployment.
The Office for National Statistics (ONS) announced earlier today that the number of people in work in Britain plunged by 156,000 in the three months through February, following a 21,000 decline in the previous three-month period. This marked the steepest decrease in job creation since August 2023 (-283,000). Economists had forecast a gain of 58,000. Meanwhile, the UK’s unemployment rate jumped to 4.2% from an upwardly revised 4.0% (from 3.9%) in the three months through January. This was the highest rate since last August and disappointed economists, who had expected it to come in at 4.0%.
However, despite signs that Britain’s labour market is cooling, wage figures proved more sticky than anticipated. Average weekly earnings, including bonuses, recorded a 5.6% YoY advance in the three months through February, unchanged compared to the previous period. Economists had forecast a 5.5% YoY gain. Excluding bonuses, average weekly earnings surged by 6.0% YoY, marginally down from 6.1% in the period through January and above economists’ prediction of 5.8%.
Markets interpreted mixed figures in the latest UK job market report as another argument for the Bank of England to wait until at least August to decide on policy easing.
Following the jobs data, markets’ bets on cuts in the BoE’s Bank Rate changed little. They continue to expect two 25-basis-point decreases by the end of the year. The first cut is fully priced by September, while the odds of an earlier cut in August are pegged at around 80%.
Tomorrow, investors will pay close attention to the British March inflation data.