Figures released yesterday showed that average earnings, including bonuses, increased by 3.4% in the three months to November 2018. It is the fastest rate since the three months to July 2008 and was better than the 3.3% the markets had been expecting. Excluding bonuses, the figure was still healthy at 3.3% and when adjusted for inflation, equates to a real terms pay increase of 1.1%. The release sent the pound above the $1.29 level and it pushed higher against the euro too.
UK employment figures were positive too, with the number of people in work increasing by 141,000 in the three months to November. This was much better than the 85,000 increase economists had predicted and the unemployment rate surprisingly dipped to 4% from 4.1% in the previous period. Public sector net borrowing figures showed that the UK’s budget deficit widened to £2.11 billion in December 2018 from £1.81 billion in the same month a year before. Excluding state-controlled banks, the deficit went up to £2.98 billion from £2.67 billion the year before, with the lowest December net borrowing since December 2000.
Today we have the Confederation of British Industry’s business optimism index for the first quarter of 2019 and industrial trends orders for January. The Bank of England’s deputy governor, Dr Ben Broadbent, is also scheduled to deliver a speech this morning and it will be interesting to see if he has anything to say about the Brexit negotiations.