Week ahead 15 February

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The main focus this week will be the labour market report

Wage growth likely remained subdued

The UK labour market report for the three months to February is due Wednesday. The report is likely to show that the unemployment rate remained low and nominal wage growth stayed subdued. The unemployment rate fell to a 10-year low of 5.1% in the three months to October. Nominal wage growth excluding bonuses eased to 1.9% in annual terms, the weakest since early 2015. The recent relative weakness of nominal wage growth suggests that the Bank of England will start to raise interest rates later rather than sooner.

Also out this week are reports on consumer, and producer, prices in January. Prices likely remained weak as the Brent crude oil price fell during the month to its lowest level in more than five years.

A second look at UK productivity in 2014

The final report on international comparisons of productivity in 2014 is out Thursday. The preliminary estimate showed that the productivity of the UK economy lagged that of most other major developed economies. We’re not expecting any major revisions in the final report. A major drawback of the report is that it focuses on productivity at the level of the whole economy and does not provide a breakdown of productivity by sector. Separate data has shown that productivity growth of UK manufacturing outperformed that of the services sector and the whole economy in the two decades to 2014, suggesting manufacturing may not be the source of the UK’s weak productivity performance.

This week we will be blogging on exports, the international productivity statistics, and EEF’s pay bulletin.

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