Davy Research

Market comment

Market comment - UK real wage squeeze set to intensify

DAVY VIEW

We expect today’s UK labour market data to show that the real wage squeeze intensified in May. We already know CPI inflation surged to 2.9% in May, while nominal wage growth has averaged just 1.7% in the previous three months. For now, the UK economy continues to create jobs, albeit at a much reduced pace on last year. However, the recent reversal in income growth suggests that the UK consumer boom is now on borrowed time.

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