So as was widely expected this week, wages are growing at a faster rate than inflation. Pay growth including bonus' hit 1.7% and inflation is at 1.6%. This is the first time wages are growing faster than inflation since the height of the financial crisis in 2008 apart from a brief period in 2010. Interesting to note that real wages are still 7.7% lower than they were in 2007 so there is still some way to go.
If this is sustained then it will be very positive for the economy as people will have more money to spend on goods and services and should push up GDP
Also the unemployment rate fell a lot further than expected to 6.9% in the 3 months to February from 7.1%. This figure is significant as it is the first time unemployment has fallen below the 7% threshold the Bank of England set for considering an interest rate hike, before it changed its forward guidance on monetary policy.
The number of people claiming Job seekers allowance fell by 30,400 in March, the lowest level since November 2008.
All really positive data coming out from the UK which continues to cement a strong recovery in the UK.
Not surprisingly, the pound had a good day yesterday, peaking to near 5 year highs against US dollar and strengthening against the euro.
Inflation in the Eurozone last month dropped to its lowest level in over 4 years falling to 0.5% in March. This is going to continue to stoke fears of deflation in the Eurozone and will probably force Draghi to come out with a statement in response to this.
The euro didn’t really weaken yesterday on the back of this news as it was probably already priced in as it came in line with expectations.
The only notable data out today is out from the US where the number of people filing for jobless claims is forecasted to increase by 15,000 – which could well put the US dollar under further selling pressure.
13:30pm – CAD – Consumer Price Index (Mar): Expected to fall to 0.4%.
13:30pm – USD – Initial Jobless Claims: Expected to rise to 315,000.
15:00pm – USD – Philadelphia Fed Manufacturing Survey (Mar): Expected to rise to 10.