UK unemployment to hold at 4.8% for a fifth consecutive month – RBC CM

Research Team at RBC Capital Markets explains that last month’s strong labour market report of UK emphatically removed the skew of risks on the unemployment rate rising from 4.8% to 4.9% and 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.

Key Quotes

“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 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.”