UK wage growth slows, may nix rate cut talks.

• Wage growth in the UK has decelerated, but it's not significant enough to increase expectations of a Bank of England rate cut.
• The unemployment rate in the UK remained unchanged at 4.2%, reinforcing the case for a cautious monetary policy.
• The upcoming event is the release of the US CPI Report.

UK Wage Growth Slows but Remains Strong:

The UK Labor Market Overview Report attracted investor attention.

The focus was on wage growth, with average earnings including bonuses increasing by 7.9% in the three months to September 2023, compared to 8.1% in August, slightly below economists' forecast of 7.4%.

The unemployment rate in the UK held steady at 4.2%, in line with forecasts of 4.3%.

Job vacancies decreased by 58,000 in the third quarter but increased by 156,000 since Q1 2020.

The employment rate declined slightly to 75.7% in Q3 2023.

Payrolled employees increased by 33,000 in October compared to September 2023.

One-off payments by the Civil Service in July and August 2023 impacted average total pay, including bonuses.

Although wage growth softened, the annual growth in regular pay, excluding bonuses, remained high. It eased from 7.9% to 7.7%.

These figures, alongside the steady UK unemployment rate, may postpone the timing of a Bank of England rate cut, aligning with Governor Andrew Bailey's recent statement that it is too early to discuss rate cuts.

The GBP/USD reacted by initially falling before rising following the release of the labor market report. This morning, the GBP/USD was up 0.07% to $1.22870.