DAVY VIEW

As we expected, this morning’s labour market update was again dovish. Private sector wage growth continues to track below the Bank of England’s (BoE) estimate for what would be consistent with its inflation target. Employee payrolls were revised downwards for June, and the first estimate for July is another soft print. The unemployment and vacancy rates also remained unchanged. We think the longer this year continues with dovish results, the less plausible it looks that Bank Rate will be hiked before year-end.