020 7898 0500Sterling suffered losses against the euro and US dollar yesterday following the release of the wage growth figures. In the three months to August, earnings rose by 2.1% which will do nothing to allay fears that UK households are truly beginning to feel the pinch. With inflation at 3% – and likely to rise further in the coming weeks – the worry is that people will resist going further into debt over the festive period and instead stop spending. This could significantly impact UK retailers.
There was some good news, as UK unemployment fell once more to reach the lowest level since 1975. However, the fall in real wages is a sign that the UK economy is weak which doesn’t bode well for the pound or British households. One wonders whether this will give BoE Governor Carney pause for thought in the run up to the interest rate decision in a couple of weeks.
Looking ahead to today, we have the UK retail sales month-on-month and year-on-year, while Friday sees the release of the public sector net borrowing.
