UK wage growth steady at expected 5.9% ahead of BOE decision
Average wages in the U.K. increased 5.9% year on year across the November 2024 to January 2025 period, the Office for National Statistics said Thursday.
The rate was steady on the previous three-month period and in line with the forecast of economists polled by Reuters.
Wage growth including bonuses came in at 5.8%. The average regular figure was 6.1% for the private sector and 5.3% in the public sector.
The ONS also released broader labor market data showing the rate of unemployment was steady between November and January at 4.4% for the third reading in a row.
The rate of U.K. wage growth is a key consideration for the Bank of England, which meets Thursday and is expected to hold interest rates.
“The latest figures show that the jobs market is not collapsing as some surveys suggest,” Ruth Gregory, deputy chief U.K. economist at Capital Economics, said in a note.
“Yet with wage growth still close to 6.0%, weak employment is not yet feeding through to a marked slowing in pay growth.”
“All this leaves the [BOE] in a tricky position. If the jobs market remains weak, then underlying price pressures should eventually fade markedly. But with wage growth still sticky that will increase the Bank’s concerns about a resurgence in inflation and keep it on its “gradual and careful” interest rate cutting path.”
— Jenni Reid
European markets: here are the opening calls
European stock markets looked set for a mixed open to Thursday’s session.
IG data showed the U.K.’s FTSE 100 opening 0.14% lower at 8,703 points, France’s CAC 40 opening down 0.05% at 8,176 points, and Germany’s DAX opening 0.09% lower at 23,274 points. However, Italy’s MIB was seen nudging 0.07% higher to 39,066 points.
— Jenni Reid
Copper prices hit highest level since October
Copper prices on listed on the London Metals Exchange notched their highest level since October.
The three-month LME copper contract was last seen trading 0.46% higher at $10,028.5 per metric ton.
In a note published Monday, Citi analysts forecast strength in copper prices this month amid temporarily stronger U.S. copper import demand, as well as broader concentrate and scrap supply constraints.
— Lee Ying Shan
China’s central bank follows U.S. Fed in keeping rates steady as tariff threats pressure yuan
China kept its key lending rates unchanged on Thursday, as Beijing juggles propping up growth and stabilizing its currency amid mounting trade frictions.
The People’s Bank of China kept the 1-year loan prime rate at 3.1% and the 5-year LPR at 3.6%, where they have been since a quarter-percentage-point cut in October.
The rate decision follows the U.S. Federal Reserve’s move to hold benchmark interest rates. Fed officials, however, indicated likely half a percentage point of rate cuts through 2025.
Read the full story here.
—Anniek Bao
Weaker growth, higher inflation ‘balance each other out’ in Fed forecast, Powell says
U.S. Federal Reserve Chair Jerome Powell speaks at a press conference, following a two-day meeting of the Federal Open Market Committee on interest rate policy, in Washington, D.C., U.S., March 19, 2025.
Nathan Howard | Reuters
Fed Chair Powell said the central bank’s forecasts for less economic growth and higher inflation in 2025 somewhat offset each other, explaining the fact that the forecast for rate cuts this year stayed at two.
“At the December meeting, the median was two cuts. So you come in and you see, broadly speaking, weaker growth but higher inflation. And they kind of balance [each other] out,” he said.
Again, Powell emphasized the forecasts are “highly uncertain.”
— Jesse Pound
