TD Securities anticipates that the UK labour market will remain soft but stable in June, projecting a 100,000 increase in employment on a three-month basis. The unemployment rate is expected to edge down to 4.7%, compared to the previous 4.9% and a market consensus of 4.8% [1]. Headline average weekly earnings growth is forecast to slow to 4.0% on a three-month year-on-year basis, down from 4.3% in May, as the impact of March's bonus figures fades. Excluding bonuses, wage growth is expected to hold steady at 3.4%, while private sector earnings ex-bonus are projected to dip to 2.7% from a prior 2.9% [1].
TD Securities notes that these wage dynamics, particularly the slowdown in headline earnings and stable ex-bonus growth, align with the Bank of England's inflation target. The firm suggests that this should reassure the majority of the Monetary Policy Committee (MPC) that labour market conditions are not contributing to second-round inflation pressures. As a result, TD expects the BoE to keep the Bank Rate unchanged [1].
The market implications of this outlook are that the Bank of England is likely to maintain its current policy stance, given the moderation in wage growth and the slight improvement in unemployment. No immediate market reaction or analyst opinions beyond TD Securities' view are discussed in the source article [1].
CONCLUSION
TD Securities expects UK labour data to show a stable but subdued market, with wage growth slowing and unemployment slightly decreasing. These trends are seen as supportive of the Bank of England keeping rates on hold, as they align with the central bank's inflation target and reduce concerns about wage-driven inflation.