Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Britain’s real wage squeeze is set to deepen today, when we get new data showing how the UK labour market is performing.
Economists predict that basic pay (excluding bonuses) grew by around 2.2% per annum in the July-September quarter, up from 2.1% a month ago.
Any increase would be welcome, but this would still leave wages lagging behind inflation – which ran at a five-year high of 3% in September and October.
Analysts at Royal Bank of Canada warn that UK wages will remain subdued for several months, but might then rise faster.
Today’s report may also show Britain’s unemployment rate stuck at just 4.3%, the lowest in over four decades.
In theory, such a tight labour market ought to drive wages higher as bosses compete to recruit workers.
Michael Hewson of CMC Markets explains:
With unemployment at 42 year lows of 4.3%, it surely can only be a matter of time before wage pressure starts to manifest itself further…..
We’ve already started to see increasing evidence that wages at the lower end of the income scale are rising at rates faster than inflation as the effects of increases in the minimum and living wage help pull up wages at the bottom of the pay scales.
This should inevitably see a trickle up effect as earners higher up the income scale start to demand higher wages in a tightening labour market,.
European stock markets are expected to dip this morning ahead of the jobs report, which is released at 9.30am.
In the City, Premier Foods, communication firm TalkTalk and housebuilders Barratt and Crest Nicholson are all reporting results.
Here’s the agenda
9.30am GMT: UK labour market report, including unemployment rate and earnings figures
10am GMT: Eurozone trade balance figures
1pm GMT: Bank of England deputy governor Ben Broadbent gives a speech at the London School of Economics.
1.30pm GMT: US inflation figures
1.30pm GMT: US retail sales