Labour market data
On Tuesday we will get a look at labour market data for February. In January the unemployment rate dropped back down to 4.3%. The labour market has been performing well over the last year, and we see no reason for a change in this trend. Perhaps more interesting will be the pay data. Wage growth continually disappointed (and puzzled us) last year, and consistently trailed inflation. However last month we got our first real signs that the much heralded wage pressures are emerging, with wages up 2.6% for the economy as a whole and 2.9% for manufacturing in the three months to January. Here’s hoping for a continuation in this upward trajectory.
The following day the ONS will release inflation data for March. Last time round, the Consumer Price Index (CPI) eased to 2.7%, down from 3% in the previous month, a greater fall than many had anticipated. This may have put some doubt into the minds of those at Threadneedle Street, with regards to the much anticipated rate rise in May, and especially given it was below the committee’s 2.9% forecast. We expect a similar reading this month, but a large fall could turn the heads of some prospective hawks.