The Bank of England deputy governor, Minouche Shafik, has said she will not vote for an interest rate rise until she is convinced wage growth has recovered. In the latest sign from policymakers that borrowing costs will remain on hold well into 2016, Shafik noted signs that the rate of earnings growth in the UK had “levelled off” recently and that other factors were also keeping inflation low, such as the strong pound and a drop in commodity prices. Shafik saw several possible explanations for wage growth easing off: that the number of hours worked per person per week may have started to decline; that employment growth has been skewed towards lower paid jobs; and that the low level of headline inflation may be leading to less generous pay rises.
In other news, appetite for leaving the European Union is gathering momentum, putting the prospect of Brexit on a knife edge, a new poll has found. According to the ICM poll for the Vote Leave campaign, when undecided voters are excluded, 50 per cent of voters would choose “Brexit”.
It is the first time since 2013 that ICM has found that voters are evenly split. It came as the EU referendum bill last night passed through the House of Lords, meaning that Mr Cameron could potentially hold his vote in June next year.
Industrial production in the Eurozone rebounded in October after two months of decline, according to new figures released this morning.
On the year, industrial production across the currency bloc was up 1.9 per cent against a 1.3% consensus. Output from Eurozone factories, quarries and mines, jumped 0.6% in October compared with -0.3% the previous month. The figures, published by Eurostat, the statistical office of the European Commission, showed the biggest annual gain was in durable consumer goods, which includes things like fridges, cars and mobile phones.
Production of durable consumer goods was up 4.2 per cent. The fastest annual growth was in Ireland, where production is 14.6 per cent higher. It also climbed at healthy rates in France, Spain and Italy, but declined 0.1 per cent in Germany, the Eurozone's biggest economy. Germany plans to raise some 210 billion euros ($231.76 billion) by issuing bonds and similar debt instruments in 2016, nearly 13 percent more than it borrowed this year, government sources said on Monday.
09:30 – GBP – Consumer Price Index – expected to rise to 0.1% from -0.1% YoY
13:30 – USD – Consumer Price Index – expected to rise to 0.5% from 0.2% YoY
Daily Market Report - 15/12/2015