In a research report, economists Robert Wood and Elliott Jordan Dork of Pannion Macroeconomic Institute pointed out that the weak situation in the UK job market is unlikely to continue deteriorating, which will limit the space for the Bank of England to further cut interest rates.
The latest data shows that in the three months ending in April, the unemployment rate in the UK rose slightly and the number of salaried employees dropped significantly.
These economic indicators released this week have strengthened the market’s expectations for subsequent interest rate cut policies.
However, the two economists analyzed and believed that the decline in the number of salaried employees in the official statistics might be distorted. This data does not cover multiple groups of workers and there is a high possibility of revision in the future.
Although the slowdown in salary growth may prompt the Bank of England to implement another benchmark interest rate cut within this year, it is expected that the upper limit of the policy interest rate adjustment will be the 25 basis point cut this time.
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