Daily Brief – UK Wage Growth

UK Wage Growth

With yesterday’s UK employment figures came some somewhat surprising commentary: inflation at 3.2% was good news for the Bank of England and the likelihood for a cut in interest rates had increased. The latter is of course good for the economy and particularly beleaguered householders worrying about their cheap mortgage deals running off in the next few months. However, beneath that inflation number is wage growth at 4.5% which again was welcomed despite that beneath that number private sector wage growth stands at 3.6% but public sector wage growth is still unsustainably high at 7.9%. The key age group and potentially economy boosting segment of overactive under achieving 16-24 year olds has a steady unemployment rate of just below 16%. That is the focus that needs to be made to get the 5.1% overall unemployment rate down and the UK economy motoring.

GBP/USD 1.3463.

Unintended Consequences

Some good cheer potentially on the horizon for UK wine and champagne drinkers: if POTUS applies a 200% tariff to French wine and champagne exports to the USA, it is reasonable to expect those exports to seek homes nearer to La Belle France and at lower prices since they will not incur shipping costs. That horizon may be rather closer than most policy changes given that POTUS is threatening a February 1 implementation date.

EUR/JPY 185.30.

Swapsies

In all the excitement and controversy of the UK Government in turn approving then deciding not to decide on the approval then finally yesterday approving the new Chinese Embassy in London’s leafy Tower Hill, it may have passed you by that the UK has a planning application for our own UK embassy in Beijing. The UK project is much smaller at GBP 100 million than the much more substantial London Chinese embassy for which the site of Royal Mint Court was purchased by the Chinese government in 2018 for GBP 255 million, but it should nevertheless not have been beyond the ken of the politically leaden footed UK PM to have secured permission for the UK’s Beijing embassy at the same time as greenlighting China’s UK embassy.

GBP/EUR 1.1469.

Asian Hornet

Once again it is hard to keep Wales out of the news with the discovery of an Asian hornet’s nest in Wrexham. The Asian hornet is bad for honeybees and pollinating insects and the Welsh government has deployed the National Bee Unit to implement the Asian Hornet Contingency Plan. In case any of our Welsh readers do sight an Asian Hornet, which is most likely between February and July, and their AHCP is not to hand, they can report their sighting on the Asian Hornet Watch mobile app.

EUR/USD 1.1733.

Who Do You Think You Are?

This nugget from 1996 is of course from the Spice Girls and hold the front page, this is the song that the Guardian newspaper rated the best Spice Girls song ever in a thoughtful analysis of the Group’s 43 songs. The reason for mentioning this is that today is Baby Spice, Emma Bunton’s 50^th Birthday; hats off to her and maybe just maybe, BS has reached the age when she will relinquish the B in BS. Or more likely not.

The race is on to get out of the bottom
The top is high so your roots are forgotten
Giving is good as long as you’re getting
What’s driving you is ambition I’m betting

I said who do you think you are (do you think you are)
I said who
Some kind of superstar

You have got to

Swing it shake it move it make it
Who do you think you are
Trust it use it prove it groove it
Show me how good you are
Swing it shake it move it make it
Who do you think you are
Trust it use it prove it groove it
Show how good you are

You’re swelling out in the wrong direction
You’ve got the bug superstar you’ve been bitten
Your trumpet’s blowing for far too long
Climbing the snake up the ladder but you’re wrong

I said who do you think you are (do you think you are)
I said who
Some kind of superstar

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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