Clues about spare capacity in the UK economy
The UK labour market report for the three months to August is due Wednesday. Data on the unemployment rate and wage growth will provide guidance about how much spare capacity is left in the labour market, one of the factors that the Bank of England’s policymakers are closely watching. The ILO joblessness rate fell to a seven-year low of 5.5% in the three months to July from 5.6% in the equivalent period to June. Wage growth continued to strengthen, with average weekly earnings excluding bonuses rising 2.9% in annual terms, the largest increase in more than six years.
Inflation probably remained subdued
The BoE’s policymakers will also closely watch the report on inflation in September out Tuesday. The annual inflation rate likely remained weak after neither rising nor falling in August. The pound weakened slightly against the euro in September, which should increase the price of imports a little. Yet this was probably offset by the Brent crude oil price falling back below $50 per barrel for most of the month.
Eurozone industrial production likely to be weak
The eurozone’s industrial production report for August is scheduled for Wednesday. There are signs that industrial production weakened in month-ago terms after rising 0.6% in July. Industrial production in Germany and France - the two largest economies in the eurozone - fell in August, with manufacturing down in both by around 1%.