This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/business/live/2017/mar/15/federal-reserve-interest-rates-uk-unemployment-business-live
The article has changed 22 times. There is an RSS feed of changes available.
| Version 4 | Version 5 |
|---|---|
| UK jobless rate hits joint lowest since 1975 but wage growth slows - live updates | |
| (35 minutes later) | |
| 10.43am GMT | |
| 10:43 | |
| The drop in real wage growth, to just 0.8%, is “terrible news”, warns the Resolution Foundation. | |
| Laura Gardiner, their senior policy analyst, fears that Britain’s “short-lived pay recovery” could end soon. | |
| Weak pay rises and rising inflation mean that a fresh squeeze is due later this year, and has already begun for some workers, especially in the public sector. | |
| “The incredibly poor outlook for pay has pushed a return to pre-crash earnings back well into the next parliament, making the 2010s the weakest decade for pay growth since the Napoleonic wars. | |
| 10.35am GMT | |
| 10:35 | |
| Ian Kernohan, Economist at Royal London Asset Management, is also concerned by the weak pay growth. | |
| He believes it will prevent the Bank of England raising interest rates this year. | |
| Regular pay growth was disappointing at just 2.3%, and with inflation rising, a squeeze on real household incomes is a major reason why we expect economic growth to slow this year. We expect the MPC to keep interest rates on hold until 2019 at the earliest.” | |
| 10.31am GMT | |
| 10:31 | |
| A couple more charts from today’s report: | |
| 10.25am GMT | |
| 10:25 | |
| UK real wage growth falls again | |
| The drop in average earnings (including bonuses) to 2.2% per year in November-January means that real wage growth has dropped again. | |
| UK inflation was 1.2% in November, 1.6% in December, and a blistering 1.8% in January. So real wage growth was actually only around 0.8%. | |
| Inflation is likely to have jumped again in February (we find out next week) | |
| John Hawksworth, chief economist at PwC, fears that inflation could overtake wage growth this year: | |
| “UK jobs growth was more robust than expected in the three months to January, rising by over 90,000 compared to the previous three months. The momentum of jobs growth actually looks somewhat stronger now than a few months ago, while the unemployment rate fell to 4.7%, its lowest level since 1975. For the moment, the jobs market remains in fine fettle. | |
| “There was less good news on average earnings growth, which fell back to just 2.2% in the three months to January. With consumer price inflation already up to 1.8% in January and set to rise further over the coming months, real earnings growth could be back in negative territory by the end of 2017. This is likely to dampen consumer spending, which could eventually feed through into slower jobs growth as well.” | |
| Updated | |
| at 10.27am GMT | |
| 10.14am GMT | |
| 10:14 | |
| Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), says the UK labour market seems to be in good shape: | |
| “The UK’s jobs market is going from strength to strength, with the number of people in work continuing to rise and unemployment also falling. | |
| But Thiru also expects unemployment to rise in the months ahead, while wage growth stalls: | |
| “UK labour market conditions may cool over the next few years as the expected slowdown in growth and the rising burden of upfront business costs stifle firms’ hiring intentions. That said, we expect that the UK unemployment rate will reach a peak of 5.3% next year, still some way below the historical average. | |
| “However, average pay growth continues to slow, and it appears increasingly likely that inflation will outstrip earnings growth in the coming months, which will put further pressure on consumer’s spending power. | |
| 10.04am GMT | 10.04am GMT |
| 10:04 | 10:04 |
| Self-employment total jumps | Self-employment total jumps |
| The number of self-employed people in the UK is rising faster than the number of employed workers, today’s report shows. | The number of self-employed people in the UK is rising faster than the number of employed workers, today’s report shows. |
| The ONS reports that in the last year: | The ONS reports that in the last year: |
| employees increased by 144,000 to 26.83 million (84.2% of all people in work) | employees increased by 144,000 to 26.83 million (84.2% of all people in work) |
| self-employed people increased by 148,000 to 4.80 million (15.1% of all people in work) | self-employed people increased by 148,000 to 4.80 million (15.1% of all people in work) |
| Professor Geraint Johnes, Director of Research at Lancaster University’s Work Foundation, says the rise in ‘gig economy’ jobs (such as delivery drivers) is responsible: | Professor Geraint Johnes, Director of Research at Lancaster University’s Work Foundation, says the rise in ‘gig economy’ jobs (such as delivery drivers) is responsible: |
| “The latest labour market statistics show a large rise in employment and a fall in unemployment (with the rate down to 4.7%). The big gain has come from full-time self-employment - a rise of some 94000 on the quarter - perpetuating the apparent ascendancy of the gig economy. | “The latest labour market statistics show a large rise in employment and a fall in unemployment (with the rate down to 4.7%). The big gain has come from full-time self-employment - a rise of some 94000 on the quarter - perpetuating the apparent ascendancy of the gig economy. |
| Professor Johnes is also concerned that wage growth dropped again: to just 2.2% year on year. | Professor Johnes is also concerned that wage growth dropped again: to just 2.2% year on year. |
| “Over the last quarter of 2016 there was a large rise in employment in construction - some 36000 new jobs in this sector. The fall in unemployment is patchy across regions, with the latest regional data indicating increases in both London and the West Midlands. | “Over the last quarter of 2016 there was a large rise in employment in construction - some 36000 new jobs in this sector. The fall in unemployment is patchy across regions, with the latest regional data indicating increases in both London and the West Midlands. |
| “Increases in total pay, however, continue to be moderate, with the three month average now growing at an annual rate of 2.2% (down from 2.6% last month). Specifically in construction, the rate of growth has collapsed, and this may be an early sign that the employment growth in that sector may not last.” | “Increases in total pay, however, continue to be moderate, with the three month average now growing at an annual rate of 2.2% (down from 2.6% last month). Specifically in construction, the rate of growth has collapsed, and this may be an early sign that the employment growth in that sector may not last.” |
| 9.57am GMT | 9.57am GMT |
| 09:57 | 09:57 |
| Technically, Britain’s jobless rate is now at its joint lowest for 42 years. | Technically, Britain’s jobless rate is now at its joint lowest for 42 years. |
| The unemployment rate also fell to 4.7% in 2005. It’s not been lower since the heady days of 1975, the year Queen released Bohemian Rhapsody, and Monty Python and the Holy Grail hit the screens. | The unemployment rate also fell to 4.7% in 2005. It’s not been lower since the heady days of 1975, the year Queen released Bohemian Rhapsody, and Monty Python and the Holy Grail hit the screens. |
| 9.47am GMT | 9.47am GMT |
| 09:47 | 09:47 |
| Here’s the key points from today’s UK jobs report (which is online here) | Here’s the key points from today’s UK jobs report (which is online here) |
| Unemployment down, employment up, pay growing faster than prices (for now). All the arrows pointing firmly in the right direction. pic.twitter.com/pMCJzZV7cH | Unemployment down, employment up, pay growing faster than prices (for now). All the arrows pointing firmly in the right direction. pic.twitter.com/pMCJzZV7cH |
| 9.34am GMT | 9.34am GMT |
| 09:34 | 09:34 |
| UK JOBLESS RATE HITS LOWEST SINCE 1975 | UK JOBLESS RATE HITS LOWEST SINCE 1975 |
| Breaking! Britain’s unemployment rate has fallen to its joint lowest level since 1975, at 4.7% in the three months to January. | Breaking! Britain’s unemployment rate has fallen to its joint lowest level since 1975, at 4.7% in the three months to January. |
| That’s down from 4.8% a month ago, according to today’s report from The Office for National Statistics. | That’s down from 4.8% a month ago, according to today’s report from The Office for National Statistics. |
| It suggests that Britain’s labour market hasn’t been hit badly by the Brexit vote. | It suggests that Britain’s labour market hasn’t been hit badly by the Brexit vote. |
| #Unemployment rate (for people aged 16+) 4.7% for Nov-Jan 2017; last time lower was 1975 https://t.co/Ff0ljvciPy pic.twitter.com/hzwdAW3YT8 | #Unemployment rate (for people aged 16+) 4.7% for Nov-Jan 2017; last time lower was 1975 https://t.co/Ff0ljvciPy pic.twitter.com/hzwdAW3YT8 |
| But.... wage growth has slowed sharply. | But.... wage growth has slowed sharply. |
| Average earnings, excluding bonuses, only rose by 2.3% year-on-year - down from 2.6% a month ago. That’s even worse than expected, and means that real wage growth has taken another hit. | Average earnings, excluding bonuses, only rose by 2.3% year-on-year - down from 2.6% a month ago. That’s even worse than expected, and means that real wage growth has taken another hit. |
| Including bonuses, average earnings only rose by 2.2% - the weakest rise since April 2016. | Including bonuses, average earnings only rose by 2.2% - the weakest rise since April 2016. |
| More details and reaction to follow! | More details and reaction to follow! |
| Updated | Updated |
| at 9.42am GMT | at 9.42am GMT |
| 9.25am GMT | 9.25am GMT |
| 09:25 | 09:25 |
| Here’s a reminder of how real pay growth (wages minus inflation) has slowed in the last few months: | Here’s a reminder of how real pay growth (wages minus inflation) has slowed in the last few months: |
| As price inflation continues to rise, eyes will once again turn to today's figures for UK earnings growth. pic.twitter.com/5DVQP1x2jM | As price inflation continues to rise, eyes will once again turn to today's figures for UK earnings growth. pic.twitter.com/5DVQP1x2jM |
| 8.58am GMT | 8.58am GMT |
| 08:58 | 08:58 |
| Jordan Hiscott, chief trader at ayondo markets, believes European investors will be crossing their fingers and hoping that the liberal VVD party led by Mark Rutte wins the most seats in today’s Dutch election. | Jordan Hiscott, chief trader at ayondo markets, believes European investors will be crossing their fingers and hoping that the liberal VVD party led by Mark Rutte wins the most seats in today’s Dutch election. |
| Hiscott says: | Hiscott says: |
| “Tomorrow’s Dutch elections could be yet another watershed moment for Europe, leading to further political fragmentation. With a country known for its liberal traditions, it’s been surprising that Geert Wilders and his PVV party have managed to assert themselves so much, taking the lead at some point in the last few weeks. | “Tomorrow’s Dutch elections could be yet another watershed moment for Europe, leading to further political fragmentation. With a country known for its liberal traditions, it’s been surprising that Geert Wilders and his PVV party have managed to assert themselves so much, taking the lead at some point in the last few weeks. |
| “Most recently though the VVD - the People’s Party for Freedom & Democracy - has re-taken the lead and investors looking for stability in the financial markets will welcome this. The possibility of the PVV coming to power, with its anti-EU stance, could have had a dramatically effect on the EUR FX and Dutch equities markets, both largely negative. | “Most recently though the VVD - the People’s Party for Freedom & Democracy - has re-taken the lead and investors looking for stability in the financial markets will welcome this. The possibility of the PVV coming to power, with its anti-EU stance, could have had a dramatically effect on the EUR FX and Dutch equities markets, both largely negative. |
| But as I flagged up earlier, the Dutch voting system - and its fragmented politics - means a coalition government is all-but certain. And with all the other main parties vowing not to work with Wilders, the blonde populist could be thwarted. | But as I flagged up earlier, the Dutch voting system - and its fragmented politics - means a coalition government is all-but certain. And with all the other main parties vowing not to work with Wilders, the blonde populist could be thwarted. |
| Duncan Robinson of the FT has done a good preview: | Duncan Robinson of the FT has done a good preview: |
| "In Dutch politics the vote is not the beginning of the end but the end of the beginning." https://t.co/potdgNGY7N | "In Dutch politics the vote is not the beginning of the end but the end of the beginning." https://t.co/potdgNGY7N |
| 8.51am GMT | 8.51am GMT |
| 08:51 | 08:51 |
| European stock markets are up across the board this morning. | European stock markets are up across the board this morning. |
| The FTSE 100 has gained 0.2% to 7,373 points - less than 20 points shy of its all-time high. | The FTSE 100 has gained 0.2% to 7,373 points - less than 20 points shy of its all-time high. |
| That suggests investors aren’t too anxious about the UK jobs report, or the US rate decision. | That suggests investors aren’t too anxious about the UK jobs report, or the US rate decision. |
| Connor Campbell of SpreadEx suspects traders will be watching the Dutch election closely: | Connor Campbell of SpreadEx suspects traders will be watching the Dutch election closely: |
| There isn’t a lot for the region to do today, so any political news out of the Netherlands might be its main driver of movement as Wednesday progresses. | There isn’t a lot for the region to do today, so any political news out of the Netherlands might be its main driver of movement as Wednesday progresses. |
| Analyst Jens Bastian points out that the Netherland’s political drama has implications for the rest of Europe. It could slow down the process of handing more bailout money to Greece: | Analyst Jens Bastian points out that the Netherland’s political drama has implications for the rest of Europe. It could slow down the process of handing more bailout money to Greece: |
| Any delays in government formation in #Netherlands spells trouble for #Greece and conclusion of second review. Dutch parliament must approve | Any delays in government formation in #Netherlands spells trouble for #Greece and conclusion of second review. Dutch parliament must approve |
| (not that Greece and her creditors have reached an agreement on its bailout programme) | (not that Greece and her creditors have reached an agreement on its bailout programme) |
| Updated | Updated |
| at 9.10am GMT | at 9.10am GMT |
| 8.36am GMT | 8.36am GMT |
| 08:36 | 08:36 |
| The pound is having a good morning, jumping almost one cent against the US dollar to $1.223. | The pound is having a good morning, jumping almost one cent against the US dollar to $1.223. |
| Some traders are attributing the rise to a report in The Times today, which argues that the Bank of England should consider raising interest rates soon. | Some traders are attributing the rise to a report in The Times today, which argues that the Bank of England should consider raising interest rates soon. |
| The Times runs its own ‘shadow monetary policy committee’, which gives its own views on what the BoE ought to do. And three of its members believe rates need to rise now, back to 0.5%, to address the jump in inflation. Another three reckon rates should rise in April. | The Times runs its own ‘shadow monetary policy committee’, which gives its own views on what the BoE ought to do. And three of its members believe rates need to rise now, back to 0.5%, to address the jump in inflation. Another three reckon rates should rise in April. |
| Charles Goodhart, a former Bank ratesetter, argues that the Bank should send a signal when it announces this month’s decision, tomorrow: | Charles Goodhart, a former Bank ratesetter, argues that the Bank should send a signal when it announces this month’s decision, tomorrow: |
| “They should lay the ground in the accompanying minutes for a possible increase in interest rates at their next meeting.” | “They should lay the ground in the accompanying minutes for a possible increase in interest rates at their next meeting.” |
| 8.16am GMT | 8.16am GMT |
| 08:16 | 08:16 |
| There’s a chance that Britain’s jobless rate could hit a new 11-year low of 4.7% today, down from last month’s 4.8%. | There’s a chance that Britain’s jobless rate could hit a new 11-year low of 4.7% today, down from last month’s 4.8%. |
| That’s according to RBC Capital Markets, who also predict that wage growth will slow. | That’s according to RBC Capital Markets, who also predict that wage growth will slow. |
| Last month’s strong report emphatically removed the skew of risks on the unemployment rate rising from 4.8% to 4.9%. Indeed, if anything, the skew of risks on this occasion is that it could actually drop to 4.7% but our central expectation is that unemployment holds at 4.8% for a fifth consecutive month. | Last month’s strong report emphatically removed the skew of risks on the unemployment rate rising from 4.8% to 4.9%. Indeed, if anything, the skew of risks on this occasion is that it could actually drop to 4.7% but our central expectation is that unemployment holds at 4.8% for a fifth consecutive month. |
| The 3m/3m employment level looks set to post a healthy gain too as the recently softness provides a relatively easy comparator for the latest data. The 37k 3m/3m gain last time should well at least be matched on this occasion. | The 3m/3m employment level looks set to post a healthy gain too as the recently softness provides a relatively easy comparator for the latest data. The 37k 3m/3m gain last time should well at least be matched on this occasion. |
| For average earnings we look for growth to ease to 2.4% 3m/y for both the including and excluding bonus measures from 2.6% 3m/y last time. This would be consistent with the message from the Bank of England Agents’ recent survey on pay settlements which pointed towards growth slowing from 2.7% on average in 2016 to 2.2% for 2017 | For average earnings we look for growth to ease to 2.4% 3m/y for both the including and excluding bonus measures from 2.6% 3m/y last time. This would be consistent with the message from the Bank of England Agents’ recent survey on pay settlements which pointed towards growth slowing from 2.7% on average in 2016 to 2.2% for 2017 |
| 7.46am GMT | 7.46am GMT |
| 07:46 | 07:46 |
| UK cuts stake in Lloyds below 3% | UK cuts stake in Lloyds below 3% |
| More than eight years after bailing Lloyds Banking Group out, the British government has taken another step towards the exit door. | More than eight years after bailing Lloyds Banking Group out, the British government has taken another step towards the exit door. |
| The UK has sold another slice of Lloyds shares, taking its stake below the 3% level. | The UK has sold another slice of Lloyds shares, taking its stake below the 3% level. |
| According to the Treasury, this means taxpayers have recovered over £19.5bn of the £20.3bn which they put into Lloyds, once share sales and dividends received are accounted for. | According to the Treasury, this means taxpayers have recovered over £19.5bn of the £20.3bn which they put into Lloyds, once share sales and dividends received are accounted for. |
| Economic Secretary to the Treasury, Simon Kirby, says: | Economic Secretary to the Treasury, Simon Kirby, says: |
| “Lloyds’ recent annual results show that we are in a good position to reduce our shareholding further and expect to recover all of the money taxpayers injected into the bank during the financial crisis.” | “Lloyds’ recent annual results show that we are in a good position to reduce our shareholding further and expect to recover all of the money taxpayers injected into the bank during the financial crisis.” |
| Government stake in Lloyds falls again to below 3% | Government stake in Lloyds falls again to below 3% |
| “Today’s announcement moves Lloyds another step closer to full private ownership" says Lloyds | “Today’s announcement moves Lloyds another step closer to full private ownership" says Lloyds |
| 7.43am GMT | 7.43am GMT |
| 07:43 | 07:43 |
| The agenda: UK unemployment and US rate hike (probably) | The agenda: UK unemployment and US rate hike (probably) |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| Central bankers like to avoid surprising the markets. So with everyone expecting a US interest rate rise tonight, there’s no reason for the Federal Reserve to worry about announcing its first hike of 2017. | Central bankers like to avoid surprising the markets. So with everyone expecting a US interest rate rise tonight, there’s no reason for the Federal Reserve to worry about announcing its first hike of 2017. |
| But it’s not quite a simple as that. Investors across the globe want to know how rapidly the Fed will act this year - is it still expecting three rate hikes this year? Might we only see two, or should traders brace for as many as four? | But it’s not quite a simple as that. Investors across the globe want to know how rapidly the Fed will act this year - is it still expecting three rate hikes this year? Might we only see two, or should traders brace for as many as four? |
| That means we could see market volatility when the Fed releases its statement, and when Janet Yellen faces the press. | That means we could see market volatility when the Fed releases its statement, and when Janet Yellen faces the press. |
| We have to wait a few hours for this excitement, though: | We have to wait a few hours for this excitement, though: |
| 2pm EDT/6pm GMT: Fed interest rate decision | 2pm EDT/6pm GMT: Fed interest rate decision |
| 2.30pm EDT/6.30pm GMT: Press conference with Fed chair Janet Yellen | 2.30pm EDT/6.30pm GMT: Press conference with Fed chair Janet Yellen |
| But in the meantime, we’re also getting a new healthcheck on Britain’s jobs market at 9.30am. | But in the meantime, we’re also getting a new healthcheck on Britain’s jobs market at 9.30am. |
| Economists expect that the UK unemployment rate will remain at just 4.8% in the thee months to January, its lowest since the financial crisis. | Economists expect that the UK unemployment rate will remain at just 4.8% in the thee months to January, its lowest since the financial crisis. |
| But the wages figures could show a slight slowdown, with average earnings (excluding bonuses) tipped to rise by 2.5% per year, down from 2.6% last month. That would be a worry, given inflation is picking up. | But the wages figures could show a slight slowdown, with average earnings (excluding bonuses) tipped to rise by 2.5% per year, down from 2.6% last month. That would be a worry, given inflation is picking up. |
| Also coming up: | Also coming up: |
| It’s election day in the Netherlands. Can far-right leader Geert Wilders notch up another win for the populists and beat mainstream rivals, such as PM Mark Rutte’s VVD? | It’s election day in the Netherlands. Can far-right leader Geert Wilders notch up another win for the populists and beat mainstream rivals, such as PM Mark Rutte’s VVD? |
| Results are expected in the early hours of Thursday. No party is likely to win a majority meaning it could take weeks for a coalition to be agreed. | Results are expected in the early hours of Thursday. No party is likely to win a majority meaning it could take weeks for a coalition to be agreed. |
| Dutch PM Mark Rutte 'boosted by spat with Turkey' as election nears https://t.co/2WES97kp02 | Dutch PM Mark Rutte 'boosted by spat with Turkey' as election nears https://t.co/2WES97kp02 |
| European stock markets are expected to rise modestly in early trading. | European stock markets are expected to rise modestly in early trading. |
| Our European opening calls:$FTSE 7364 up 6$DAX 12000 up 11$CAC 4982 up 7$IBEX 9932 up 27$MIB 19582 up 44 | Our European opening calls:$FTSE 7364 up 6$DAX 12000 up 11$CAC 4982 up 7$IBEX 9932 up 27$MIB 19582 up 44 |