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12 Nov 2014
UK jobs numbers and the Quarterly Inflation Report – FXStreet
FXStreet (Barcelona) - FXStreet Analyst, Craig Drake highlights that market expectations remain muted for the QIR report when compared to September, but still sees the big focus to be on the QIR.
Key Quotes
“Consensus expectations are for a further fall to 5.9 percent in September, breaking below 6 percent for the first time since September 2008.With the unemployment rate in a long downwards trend, focus remains on wage growth. Consensus expectations are for wages to creep higher to 0.8 percent year-on-year, with wages ex-bonuses up 1.1 percent. However, wages continue to lag inflation.”
“After the jobs numbers, the big focus will be on the QIR. Expectations are slightly more muted compared with the September report, with weaker growth expectations leaving less slack in the economy for an imminent rate hike– but whether concerns over this spare capacity are voiced in the QIR will be key. As we can see from the implied probability of a BoE rate hike from 90-day sterling futures, markets have kicked their rate hike expectations well into 2015.”
“It’s highly likely that we will see a downwards revision of CPI forecasts – in line with consensus expectations – again playing into expectations of a mid-2015 hike. Consensus expectations also point to a slight downwards revision of GDP to 3.5 percent this year and 3 percent next year.”
Key Quotes
“Consensus expectations are for a further fall to 5.9 percent in September, breaking below 6 percent for the first time since September 2008.With the unemployment rate in a long downwards trend, focus remains on wage growth. Consensus expectations are for wages to creep higher to 0.8 percent year-on-year, with wages ex-bonuses up 1.1 percent. However, wages continue to lag inflation.”
“After the jobs numbers, the big focus will be on the QIR. Expectations are slightly more muted compared with the September report, with weaker growth expectations leaving less slack in the economy for an imminent rate hike– but whether concerns over this spare capacity are voiced in the QIR will be key. As we can see from the implied probability of a BoE rate hike from 90-day sterling futures, markets have kicked their rate hike expectations well into 2015.”
“It’s highly likely that we will see a downwards revision of CPI forecasts – in line with consensus expectations – again playing into expectations of a mid-2015 hike. Consensus expectations also point to a slight downwards revision of GDP to 3.5 percent this year and 3 percent next year.”