UK wages are stagnant , BoE on hold – BBH

By FXStreet Analysts at Brown Brothers Harriman explained that in the UK, the lack of wage increases has deterred the Bank of England from raising interest rates.

Key Quotes:

“The rise in earnings in the middle of last year were not sustained and seemed to have been a bit a statistical quirk.”

Average weekly earning had fallen 0.1% in the middle of 2014 on a three-month year-over-year measure. In May 2015, it had risen to 3.3%.”

“This is what prompted many to expect a BOE hike first in 2015 and then in early 2016.”

“It has been pushed out into 2017 as average weekly earnings slumped to 2.0% in November.”

“The December figures will be released next week. Several MPC members have indicated that until there is better traction on wages, they are hard pressed to support higher interest rates.”
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Source:: FX Street