Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Sterling tumbles as BoE warns of high inflation, low wage recovery

1 comment
Sterling tumbles as BoE warns of high inflation, low wage recovery

Inflation is expected to remain close to its mandated upper limit as slack in the labour market disappears fast than expected, the Bank of England’s Inflation Report has warned.

The Bank slashed its wage growth forecast from 2.5% to 1.25% however, and said that the persistent strength of sterling was concerning, sending the pound tumbling 0.45% against the dollar.  

‘The [Monetary Policy] Committee has revised up its estimate of medium-term equilibrium labour force participation and revised down that for unemployment,’ said the Bank.

Inflation is expected to remain close to its mandated upper limit as slack in the labour market disappears fast than expected, the Bank of England’s Inflation Report has warned.

The Bank slashed its wage growth forecast from 2.5% to 1.25% however, and said that the persistent strength of sterling was concerning, sending the pound tumbling 0.45% against the dollar.  

‘The [Monetary Policy] Committee has revised up its estimate of medium-term equilibrium labour force participation and revised down that for unemployment,’ said the Bank.

‘Domestically, output is sensitive to the assumption that a gradual revival in productivity and real household incomes help to underpin a sustained expansion.

‘Productivity growth has shown few signs yet of a recovery and is now projected to pick up more slowly than anticipated in May.’

Currency markets have having taken their cue from the UK labour report issued simultaneously, which showed the headline rate of wage growth actually over the three months.

Including bonuses wage growth fell to a fresh record low of just 0.6% in June said the Office for National Statistics.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play JPM’s Negyal: Back divis to temper EM volatility

JPM’s Negyal: Back divis to temper EM volatility

Omar Negyal, co-manager of the JPMorgan Global Emerging Markets Income trust, says a dividend approach to emerging markets reduces the volatility of investing in the asset class.

Play WMR: Why Russia will lose this war

WMR: Why Russia will lose this war

Author and journalist Adam Lebor believes a perfect storm is brewing when it comes to the Russian economy. .

Play WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

Chief economic adviser to London mayor Boris Johnson outlines the geo-political risks in Asia and explains why the risk of another eurozone crisis must not be underestimated.

Your Business: Cover Star Club

Profile: The adviser that tempted Robin Minter-Kemp on board

Profile: The adviser that tempted Robin Minter-Kemp on board

It is rare to meet an impassioned individual who is willing to bang the drum for investment advisory right now

Wealth Manager on Twitter