Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Today we discover if Britain’s economy is continuing to create jobs, and learn how much the UK government raked in from taxpayers last month.
The latest unemployment figures (due at 9.30am) are expected to show that the UK jobless rate stuck at just 4.3% in the last quarter of 2017, the lowest in over 40 years. But the bigger question is whether wages picked up.
Economists predict that basic pay rose by 2.4% per annum in the three months December, while pay including bonuses rose by 2.5%. That would match last month’s figures, and mean that earnings are still falling behind inflation (3% in January).
A strong earnings report would be very welcome, as households have suffered a long cost of living squeeze since inflation started shooting higher.
But, it might also encourage the Bank of England to raise interest rates in a couple of months time – bad news for indebted families who are already struggling.
David Madden of CMC Markets says:
The earnings figures will be the ones to watch as job creation in the UK has greatly outpaced wage increases. Average earnings has been slow to pick up, and should we see it tick up it could trigger another leg higher in the pound.
The most recent Bank of England (BoE) update showed us they are little on the hawkish side, and they signalled interest rates could rise sooner that some traders thought. If Britons see a respectable jump in wages, then we are more likely to see a rise in consumer spending. Dealers are preparing themselves for the possibility of a rate hike in May and the average earnings could be the catalyst.
We’ll get an insight into the Bank’s thinking, when BoE governor Mark Carney faces MPs this afternoon to discuss the latest quarterly inflation report. He’ll be accompanied by Ben Broadbent, Andy Haldane and Silvana Tenreyro.
We also get the latest UK public finances. They’re expected to show that Britain raised around £9.5bn in January – always a bumper month for tax receipts.
Data firm Markit will give its early assessment of how the eurozone’s economy is faring.
Plus, banking group Lloyds, housebuilder Barratt and roadside assistance group AA are reporting results.
9am GMT: Eurozone ‘flash’PMI survey for February
9.30am GMT: UK unemployment figures
9.30am GMT: UK public finances for January
2.15pm GMT: Bank of England governor Mark Carney questioned by the Treasury committee