DAVY VIEW

This morning’s Labour Force Survey (LFS) shows UK employment down 207,000 (or 0.6%) in the three months to July, accompanied by a rise in the unemployment rate to 4.3%. Total (8.5%) and regular (7.8%) pay growth remained at exceptionally high levels in July. Hence, despite early signs that the UK labour market is loosening, the rapid pay growth figures mean that the Bank of England will press on with a 25bp hike to 5.5% at the September 21st policy meeting.