UK's stronger wage growth backdrop suggests rate cut unlikely - ING

notes that the UK wage growth has hit another post-crisis high amid ongoing skill shortages in the jobs market and this suggests it may be too early to be talking about Bank of England rate cuts, although as ever, it all depends on Brexit.

• "At 3.9%, UK wage growth (excluding bonuses) has hit another post-crisis high and is a key reason why it is probably too early to be talking about Bank of England rate cuts. And for the time being at least, we think pay growth has the potential to remain strong. "
• "The jobs side of this month’s report was also pretty encouraging, with employment rising by 115k in the three months to June. Until recently, PMIs had hinted at improved hiring appetite among firms, perhaps triggered by the temporary lull in uncertainty after the decision to extend Article 50 back in April."
• "That’s not to say there aren’t risks. The number of job vacancies, while still high, has been falling since the start of 2019. We’d also note that a large chunk of job gains over recent months has been driven by self-employed workers – in particular part-time. Up until these latest figures, the number of people in ‘employee’ roles had been falling in the past couple of jobs reports."
• "When it comes to the Bank of England though, the stronger wage growth backdrop suggests that policy easing is unlikely in the near-term. A lot depends on Brexit of course, but for the time being, we think markets may be slightly overestimating the chances of BoE easing – investors are now pricing in a rate cut by early 2020."