The pound slipped further against the US dollar this morning
The drill into is currently at around $1.3154 against the US dollar, down 0.3 per cent this morning in the wake of the UK’s in wage growth figures.
According to data released by the Office for National Statistics (ONS) wage proliferation held at 2.2 per cent in August after July’s figures were amended up from 2.1 per cent, however this means that pay stilly lags well behind inflation as consumer price pressures bring into being to a new five-year high of 3.0 per cent last month.
Today’s text also revealed that British workers have now faced half a year of downhill real wages.
The pound is currently at around $1.3154 against the US dollar
Crunching the numbers, we don’t wait for wage growth to go much above 2.1 per cent or 2.2 per cent formerly next summer
Production experts have suggested that this gap between inflation and wage intumescence will remain for the foreseeable future and likely drag on the UK’s economic intumescence.
James Smith, Developed Markets Economist at ING said: “Crunching the enumerates, we don’t expect wage growth to go much above 2.1 per cent or 2.2 per cent ahead next summer.
“So whilst we expect headline inflation to peak at 3.1 per cent next month, the gap between CPI and wage nurturing is likely to stay fairly wide for some time to come.”
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However a little uncountable positive was the accompanying employment figures which showed that Britain’s jobless upbraid held a 42-year low in August.
Meanwhile the US dollar remains in a position of stamina today following the upbeat domestic industrial production figures unchained yesterday afternoon.
Data showed that industrial output rallied 0.3 per cent hindmost month, up from -0.7 per cent in August, despite the disruptions well-sprang by Hurricanes Harvey and Irma last month.
The GBP/USD barter rate may tumble again on Thursday
Most importantly, however, is it that the uptick in output has further bolstered the odds that the Federal Reserve will carry out a third rate hike this year, with CME Group’s FedWatch instrument currently placing the odds of a December rate hike at around 91 per cent.
Looking in advance, the GBP/USD exchange rate may tumble again on Thursday as economists forecast that UK retail rummage sales will have slumped from 1 per cent to -0.1 in September.
For the moment, with the odds of a December rate hike high, the US dollar may secure itself largely unmoved by speeches by the Fed’s Dudley and Kaplan this afternoon unless either of them propose that they may not support further monetary tightening.