Week ahead 18th April

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The main focus this week will be on the UK’s labour market report

Wage growth on the radar

The monthly UK labour market report is out Wednesday. We’ll be closely watching for signs as to whether the tight labour market has started to put upward pressure on wage growth. The last report showed that the unemployment rate remained at a decade-low of 5.1% in the three months to January as both the employment, and participation, rates were little changed. The main point of interest was wage growth excluding bonuses picked up somewhat but remaining relatively weak at 2.2% in annual terms. In manufacturing, wage growth also accelerated to 2.2%, the sector’s strongest for nearly two years. Even if Wednesday’s report shows wage growth continued to pick up, the Bank of England is likely to want to whether it is sustained before starting to think about tightening monetary policy.

For whom the till tolls

The retail sales report for March is due Thursday. Even though retail sales fell in February compared to the previous month, they have recently proved resilient thanks to the tight labour market and low inflation. Retail sales are likely to come under pressure over the course this year as inflation gradually rises. The annual inflation rate rose 0.5% in March, the largest increase in more than a year but still very low.

This week we will be blogging about EEF’s latest pay bulletin and the state of the world economy.

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