00:00What do you make of these figures we're getting this morning? Certainly the market is giving its vote.
00:03Yeah, I think broadly this is, I think, kind of what was expected.
00:07So the jobs data in the UK, as we kind of have to say almost every month, is really messy.
00:12You know, it can be very difficult to kind of get a very clear view of exactly how the labour
00:16market is performing.
00:17I think this report gives you a pretty clear indication of wage growth, particularly wage growth, excluding bonuses,
00:22the underlying wage growth, way below expectations, slowing quite a bit, including them not so much.
00:29Private sector growth, wage growth, the lowest in five years.
00:33So, again, the underlying...
00:34The lowest in five years.
00:35Again, everything is moving in the right direction from the Bank of England meeting that we just had
00:40and that kind of more dovish view that they were providing there.
00:44Unemployment ticking up a little bit as well.
00:46So really just all the metrics that you might want to see for a slightly more dovish tilt are pretty
00:50much there.
00:50On the messiness of the UK data, when does it become less messy, Sam?
00:54I mean, are they fixing this for us?
00:57Do we get a clear picture by the end of this year?
00:59Look, Tom, I mean, I hope so enormously because, you know, this is...
01:04What's had to happen over the course of the last couple of years is looking at a lot of private
01:07reports
01:08and kind of picking lots of different things into a kind of mosaic of what's going on in the jobs
01:12market.
01:14This one is getting better, the official data, and I think what you're starting to see now
01:18is the sort of rollover of some of the changes that were made, but there are still quite a few
01:22to be made as well.
01:23So we're still in this period where we're looking at lots of different data points to decide exactly how things
01:28are.
01:28Going from this data, though, which, as I say, has got better, you know, we'll say at least better than
01:33it was previously,
01:34you are seeing this sort of gradual weakening broadly in line with kind of what the Bank of England was
01:40expecting to see.
01:40Sam, thank you very much indeed. Well, that sets us up very nicely indeed to bring in our next guest.
01:46Sam Unstead, by the way, of Markets Today and our editor there with the details on the UK jobs data.
01:51Let's bring in at this point Sri Kocho Govindan, who is Senior Research Economist at Aberdeen.
01:56Sri, good morning. Thank you for sitting patiently around the desk for us.
01:58Does this reinforce your view that the BOE can go three times this year with additional cuts?
02:03Yes, I think so. I think this really does open up for a March cut now just based on this
02:08data.
02:08So we do need to see tomorrow's CPI data as well. But just looking at this detail in terms of
02:13wage growth,
02:14that does filter through into the services outlook in a few months' time.
02:18So that's something that's a key indicator that the Bank of England will be looking at.
02:23So what we've seen so far is a little bit of stickiness in services.
02:27But this does point to, you know, a step lower in terms of inflation going forward.
02:33So tomorrow's print, we are expecting some of those base effects that we had impacting inflation over the last few
02:39months,
02:40over the last year, like school fees, off-gen price cap.
02:44All of that will start to unwind and we'll see that impact tomorrow as well.
02:48So I think the combination of today's data and potential for tomorrow's inflation to be lower
02:54is likely to open up that door for a March cut and then possibly further cuts as well.
Comments