DAVY VIEW

This morning’s labour market data show the UK economy added 182,000 jobs in the three months to March, so employment rose by 0.6% to 33m. A small rise in the unemployment rate to 3.9% and a fall in vacancies to 1.08m suggest tight market conditions are easing slightly. However, private sector regular earnings growth was steady at 7% in March. This is a strong sign of the persistent inflationary pressure that the Bank of England has highlighted could justify raising interest rates further to 4.75%.