Following the excitement last week of the Bank of England monetary policy decision, we have a quieter week on the data front this time round. Indeed there is only one key data release out this week – labour market data on Tuesday.
Labour market data
Despite the weaker run of official data we have been getting over the last month or so, the labour market has remained a source of good news for the economy. In the latest release the unemployment rate dropped to a 43 year low of 4.2%, while the employment rate also remained healthy. While we don’t expect any further drops in the unemployment rate this time, the Bank of England’s latest long term forecasts have the unemployment rate falling down to 4% by 2020, suggesting there could still be some slack left in the economy.
Meanwhile wages have also begun to show signs of rising. In fact in the three months to February wages grew by 2.8%, greater than the rate of inflation, meaning that real wages turned positive for the first time in a year. Here’s hoping for more of the same this month.
Keep an eye out for our Pay Bulletin out on Thursday, which should give us further indication whether the pick-up in wages is being sustained.