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| UK wage squeeze continues, as jobless rate remains at 42-year low – business live | |
| (35 minutes later) | |
| 10.01am BST | |
| 10:01 | |
| Government: We're making 'great progress' | |
| The employment minister, Damian Hinds, has welcomed the news that Britain’s unemployment rate remains at a 42-year low, with 32.10 million people in work (up 317,000 in the last year.). | |
| Hinds says: | |
| “Our economy is helping to create full time, permanent jobs which are giving people across the UK the chance of securing a reliable income. | |
| “We’ve boosted the income for people on the lowest pay by increasing the National Living Wage and delivered the fastest pay rise for the lowest earners in 20 years. | |
| “That’s great progress and we’re determined to help more people flourish in the world of work. | |
| “For example we’ve launched our new returnship programme to help more women get into good jobs after taking time out, and to keep their career progressing.” | |
| 9.52am BST | |
| 09:52 | |
| Andy Bruce of Reuters has spotted that workers in the hospitality industry are suffering a sharp pay squeeze: | |
| One thing stuck out from UK #pay data - retail/hotel/restaurant pay growth plummeting, now weakest in almost 3 years pic.twitter.com/dPG7e8GcuG | |
| 9.48am BST | |
| 09:48 | |
| Wages have lagged behind prices for months | |
| British workers have now suffered six months of falling real wages, as this chart shows: | |
| With inflation now at 3%, a 2.1% per year pay rise simply isn’t enough, says the TUC’s general secretary Frances O’Grady: | |
| “Pay packets are taking a hammering. This is the sixth month in a row that prices have risen faster than wages. | |
| “Britain desperately needs a pay rise. Working people are earning less today (in real-terms) than a decade ago. | |
| “The Chancellor must help struggling families when he gives his Budget next month. This means ditching the artificial pay restrictions on nurses, midwives and other public sector workers. And investing in jobs that people can live on.” | |
| 9.36am BST | |
| 09:36 | |
| UK JOBS DATA RELEASED | |
| Breaking! Wage growth across the UK is still lagging behind inflation, even though the unemployment rate remains at its lowest level in 42-years. | |
| Average earnings, excluding bonuses, rose by 2.1% per year in the three months to August. That’s down from 2.2% a month ago. | |
| Including bonuses, wages rose by 2.2% - matching last month’s figures. | |
| That means that real wages are still shrinking -- inflation was 2.6% in July (the mid-point of the quarter), and jumped to 3% in September. | |
| The Office for National Statistics also reports that Britain’s unemployment rate remained at 4.3%, the lowest since 1975, thanks to another drop in the number of people out of work. | |
| The Office for National Statistics says unemployment fell by 52,000 to 1.4 million in the three months to August | |
| Here are the key points from today’s Labour Market report: | |
| The unemployment rate was 4.3% in the three months to August 2017, the joint lowest since 1975. | |
| There were 94,000 more people in work compared with the three months to May 2017, out of which 78,000 were women. | |
| The inactivity rate was 21.4%, down slightly when compared with the previous three months. | |
| In real terms, average weekly earnings fell by 0.4% on the previous year (excluding bonuses) and by 0.3% (including bonuses). | |
| In the three months to June 2017 (the latest available period), the probability of remaining in employment, for those in work, was 97.3%, the highest comparable rate since 1997. | |
| More to follow! | |
| Updated | |
| at 9.57am BST | |
| 9.27am BST | 9.27am BST |
| 09:27 | 09:27 |
| Over in Frankfurt, ECB president Mario Draghi is making another push for ‘structural reforms’ in the eurozone. | Over in Frankfurt, ECB president Mario Draghi is making another push for ‘structural reforms’ in the eurozone. |
| Draghi’s arguing (once again) that political leaders have a ‘window of opportunity’ to reform their economies, thanks to the eurozone’s current record low interest rates and QE programme. | Draghi’s arguing (once again) that political leaders have a ‘window of opportunity’ to reform their economies, thanks to the eurozone’s current record low interest rates and QE programme. |
| Usually, these talks focus on labour market reforms - which can be code for making it easier to hire and fire staff. Draghi, though, is arguing for wider reforms to the way businesses work -- and blasting ‘vested interests’ who are holding things back. | Usually, these talks focus on labour market reforms - which can be code for making it easier to hire and fire staff. Draghi, though, is arguing for wider reforms to the way businesses work -- and blasting ‘vested interests’ who are holding things back. |
| Unlike what happened in the years even before the crisis, labour market reforms must be preceded – or least accompanied by – product market reforms, otherwise wage adjustments will not be fully passed on to prices. Instead, profit mark-ups will rise and the purchasing power of households will fall, thereby worsening the economic conditions of consumers and aggravating any recession. | Unlike what happened in the years even before the crisis, labour market reforms must be preceded – or least accompanied by – product market reforms, otherwise wage adjustments will not be fully passed on to prices. Instead, profit mark-ups will rise and the purchasing power of households will fall, thereby worsening the economic conditions of consumers and aggravating any recession. |
| During the crisis, because of powerful vested interests, labour market reforms were not accompanied by product market reforms in some countries, and so wages fell and prices did not adjust in tandem. | During the crisis, because of powerful vested interests, labour market reforms were not accompanied by product market reforms in some countries, and so wages fell and prices did not adjust in tandem. |
| Strangely low turnout as #ECB #Draghi asks whether structural reforms mean “torture”. (Cue: he doesn’t think they do) pic.twitter.com/t4udGWMh7m | Strangely low turnout as #ECB #Draghi asks whether structural reforms mean “torture”. (Cue: he doesn’t think they do) pic.twitter.com/t4udGWMh7m |
| 9.09am BST | 9.09am BST |
| 09:09 | 09:09 |
| We have fresh evidence that London’s property market is cooling, from estate agent Foxtons. | We have fresh evidence that London’s property market is cooling, from estate agent Foxtons. |
| Foxtons has told the City that conditions remained “challenging’ in the last quarter Sales in July to September dropped to £10.3m, from £12.3m a year ago. | Foxtons has told the City that conditions remained “challenging’ in the last quarter Sales in July to September dropped to £10.3m, from £12.3m a year ago. |
| UK RNS today #2 - Foxtons - inline but required cost control as 'modest growth' and downward pressure on rents | UK RNS today #2 - Foxtons - inline but required cost control as 'modest growth' and downward pressure on rents |
| 8.56am BST | 8.56am BST |
| 08:56 | 08:56 |
| Rob Holdsworth of the Resolution Foundation tweets: | Rob Holdsworth of the Resolution Foundation tweets: |
| Yesterday’s inflation figures were bad for everyone under the age of 65. This morning we should get some good news on jobs - another record? | Yesterday’s inflation figures were bad for everyone under the age of 65. This morning we should get some good news on jobs - another record? |
| The UK employment juggernaut expected to rumble on - consensus is for an addition of 150k to employment. pic.twitter.com/nHOiQ7hPw6 | The UK employment juggernaut expected to rumble on - consensus is for an addition of 150k to employment. pic.twitter.com/nHOiQ7hPw6 |
| 8.43am BST | 8.43am BST |
| 08:43 | 08:43 |
| Today’s average weekly earnings figures will be ‘key’ for the markets today, says Marc Ostwald of ADM Investor Services: | Today’s average weekly earnings figures will be ‘key’ for the markets today, says Marc Ostwald of ADM Investor Services: |
| No change is seen in headline terms at a still very lowly 2.1% y/y, while the ‘core’ ex-Bonus measure is forecast to dip to 2.0% from 2.1%. | No change is seen in headline terms at a still very lowly 2.1% y/y, while the ‘core’ ex-Bonus measure is forecast to dip to 2.0% from 2.1%. |
| This will leave real earnings deep in negative territory, leaving plenty of room for doubt on whether wages are turning or have turned a corner as some MPC members have claimed, and certainly beg the question on the need for, or the wisdom of a rate hike. | This will leave real earnings deep in negative territory, leaving plenty of room for doubt on whether wages are turning or have turned a corner as some MPC members have claimed, and certainly beg the question on the need for, or the wisdom of a rate hike. |
| No change expected in either measure of the UK unemployment rate. ILO measure for September expected to be 4.3% & claimant count 2.3% pic.twitter.com/yinWc95LNV | No change expected in either measure of the UK unemployment rate. ILO measure for September expected to be 4.3% & claimant count 2.3% pic.twitter.com/yinWc95LNV |
| 8.35am BST | 8.35am BST |
| 08:35 | 08:35 |
| This chart from economist Rupert Seggins shows how UK real wages have been shrinking for several months. | This chart from economist Rupert Seggins shows how UK real wages have been shrinking for several months. |
| UK labour market stats out today and as per usual, the big news happened yesterday with the 3% inflation figure confirming more pay squeeze. pic.twitter.com/13CkopXMUv | UK labour market stats out today and as per usual, the big news happened yesterday with the 3% inflation figure confirming more pay squeeze. pic.twitter.com/13CkopXMUv |
| Today’s earnings data will show show that trend continuing. | Today’s earnings data will show show that trend continuing. |
| 8.07am BST | 8.07am BST |
| 08:07 | 08:07 |
| The agenda: UK jobs report coming up | The agenda: UK jobs report coming up |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| Today we’ll be looking at Britain’s jobs market, and asking why people aren’t being paid more when employment is at record levels. | Today we’ll be looking at Britain’s jobs market, and asking why people aren’t being paid more when employment is at record levels. |
| The latest labour market statistics, due this morning, will probably confirm that headline employment is at record levels, but that pay is still not keeping up with inflation. | The latest labour market statistics, due this morning, will probably confirm that headline employment is at record levels, but that pay is still not keeping up with inflation. |
| City experts predict that that headline unemployment rate remained at just 4.3% in the three months to August. That would be the joint-lowest in 42 years, as the labour market holds up well in the face of Brexit uncertainty. | City experts predict that that headline unemployment rate remained at just 4.3% in the three months to August. That would be the joint-lowest in 42 years, as the labour market holds up well in the face of Brexit uncertainty. |
| But wage growth will probably remain worryingly weak, at around 2.1% (possibly falling to 2.0% per year if you strip out bonuses). That would mean another fall in real wages, as inflation jumped to 3% yesterday. | But wage growth will probably remain worryingly weak, at around 2.1% (possibly falling to 2.0% per year if you strip out bonuses). That would mean another fall in real wages, as inflation jumped to 3% yesterday. |
| This is puzzling economists (in theory, you’d expect wages to rise once labour becomes scarce). But in the world of the Gig Economy, many workers are actually facing uncertain hours, poor conditions and weak wage growth. | This is puzzling economists (in theory, you’d expect wages to rise once labour becomes scarce). But in the world of the Gig Economy, many workers are actually facing uncertain hours, poor conditions and weak wage growth. |
| It all feeds into the wider conundrum of Britain’s weak productivity, and whether the country can actually handle a rise in interest rates. | It all feeds into the wider conundrum of Britain’s weak productivity, and whether the country can actually handle a rise in interest rates. |
| Today’s figures will be closely monitored by economists, business leaders, and investors. | Today’s figures will be closely monitored by economists, business leaders, and investors. |
| Craig Erlam, Senior Market Analyst at OANDA, says: | Craig Erlam, Senior Market Analyst at OANDA, says: |
| Once again though, the unemployment data is expected to paint one picture with the rate remaining at 4.3% while average earnings paints an entirely different one, as wages rise by only 2.1%. | Once again though, the unemployment data is expected to paint one picture with the rate remaining at 4.3% while average earnings paints an entirely different one, as wages rise by only 2.1%. |
| Negative earnings growth is one of the factors that is likely to weigh on the economy going forward and makes the BoE’s decision on interest rates all the more difficult. | Negative earnings growth is one of the factors that is likely to weigh on the economy going forward and makes the BoE’s decision on interest rates all the more difficult. |
| Also coming up today | Also coming up today |
| Consumer good giant Reckitt Benckiser, chemicals and paint maker Akzo Nobel, and London estate agent Foxtons are reporting results. | Consumer good giant Reckitt Benckiser, chemicals and paint maker Akzo Nobel, and London estate agent Foxtons are reporting results. |
| Mining giant Rio Tinto is in the spotlight today. Former CEO Tom Albanese and ex-CFO Guy Elliott have been charged with fraud by US officials, over coal assets in Mozambique which were bought for $3.7bn and later sold for just $50m. | Mining giant Rio Tinto is in the spotlight today. Former CEO Tom Albanese and ex-CFO Guy Elliott have been charged with fraud by US officials, over coal assets in Mozambique which were bought for $3.7bn and later sold for just $50m. |
| Albanese and Elliott are accused of inflating the value of the assets. Both men deny any wrongdoing. More on this shortly.... | Albanese and Elliott are accused of inflating the value of the assets. Both men deny any wrongdoing. More on this shortly.... |
| Investors will be keeping an eye on China, as the Chinese party congress begins. President Xi got the ball rolling by hailing the dawn of a “new era” of Chinese politics and power. | Investors will be keeping an eye on China, as the Chinese party congress begins. President Xi got the ball rolling by hailing the dawn of a “new era” of Chinese politics and power. |
| In a speech lasting over three hours, Xi declared: | In a speech lasting over three hours, Xi declared: |
| “This is a new historic juncture in China’s development. | “This is a new historic juncture in China’s development. |
| “The Chinese nation ... has stood up, grown rich, and become strong - and it now embraces the brilliant prospects of rejuvenation ... It will be an era that sees China moving closer to centre stage and making greater contributions to mankind.” | “The Chinese nation ... has stood up, grown rich, and become strong - and it now embraces the brilliant prospects of rejuvenation ... It will be an era that sees China moving closer to centre stage and making greater contributions to mankind.” |
| Wishful thinking in early coverage of Xi's Party Congress speech (now at more than three hours) pic.twitter.com/DIXYZPVys4 | Wishful thinking in early coverage of Xi's Party Congress speech (now at more than three hours) pic.twitter.com/DIXYZPVys4 |
| Here’s the agenda: | Here’s the agenda: |
| 9.10am BST: European Central Bank president Mario Draghi gives a speech in Frankfurt. It’s on “Structural reforms in the euro area”, one of Draghi’s favourite subjects. | 9.10am BST: European Central Bank president Mario Draghi gives a speech in Frankfurt. It’s on “Structural reforms in the euro area”, one of Draghi’s favourite subjects. |
| 9.30am BST: UK labour market report | 9.30am BST: UK labour market report |
| 1.30pm BST: US housing data for September. It’ll show how many building permits were issued, and how many new construction projects began | 1.30pm BST: US housing data for September. It’ll show how many building permits were issued, and how many new construction projects began |
| Updated | Updated |
| at 8.20am BST | at 8.20am BST |