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| UK wages growth slips, as Bank of England governor quizzed by MPs - business live | |
| (35 minutes later) | |
| While the stream is down from Farnborough, over to the day’s big UK data release. | |
| Wages growth slipped to its weakest level in six months, rising by 2.5% in the three months to May compared to a 2.6% increase in the previous three months. Pay excluding bonuses came in at 2.7%. These were in line with analyst forecasts, and are above the inflation rate of 2.4%. | |
| The unemployment rate remained at 4.2%, while 137,000 jobs were created over the three months to May. | |
| Treasury Select Committee hearing on financial stability with BoE taking place at Farnborough Air Show. Judging by Twitter comments the poor signal that plagues the air show is also stopping the live streaming of the session for those who aren't here. pic.twitter.com/1OimL2HHtD | |
| Nicky Morgan now moves on to Brexit and derivatives, but the answers are impossible to hear. And the live stream has now died...... | |
| Hilarious. Mark Carney and Bank bigwigs rabbiting on about technological resilience at Treasury Select Committee. We''re hearing about one sentence in five because the sound keeps cutting out on the livestream from Farnborough | |
| And we’re off (with a rather poor audio signal from Farnborough). Chair Nicky Morgan asks about cyber attacks on the financial system as well as internal bank problems such as TSB and VIsa experienced. | |
| However the signal keeps cutting out making the answers difficult to get... | |
| Ooops. Treasury Select Cee at Farnborough, showingcasing all that's best in technnology. Livestream is audio only and keeps cutting out | |
| "Two things. Cyber secur.... (buffering) .... which is why banks .... (buffering).. Two points (buffering) ... operational resilience ... (buffering)" | |
| Massive tension as hordes of YouTubers await the BoE hearing before Treasury Committee pic.twitter.com/ywWehoejAl | Massive tension as hordes of YouTubers await the BoE hearing before Treasury Committee pic.twitter.com/ywWehoejAl |
| The session with the Bank will be streamed live here. | The session with the Bank will be streamed live here. |
| The Bank of England’s financial stability report for June - which is what Carney and Co will be talking about shortly - warned that the EU was not doing enough to prevent disrupution to the financial system after Brexit. It said material risks remained to trillions of pounds worth of contracts. | The Bank of England’s financial stability report for June - which is what Carney and Co will be talking about shortly - warned that the EU was not doing enough to prevent disrupution to the financial system after Brexit. It said material risks remained to trillions of pounds worth of contracts. |
| Is the pound likely to take more notice of the economic data, or the current political uncertainty? Kit Juckes at Societe Generale says: | Is the pound likely to take more notice of the economic data, or the current political uncertainty? Kit Juckes at Societe Generale says: |
| The contrast between the economy, which fully justifies the market’s belief that rates will rise in August, the politics, which is a shambles, is ever more striking. The Prime Minister has sacrificed aspect of her ‘soft Brexit’ strategy to get legislation through parliament, relying on Brexiteer Labour MPs in the process and damaging her own support in the process. Labour strategists are dreaming that she’ll make the Conservatives unelectable for a decade or more. But does it matter for the pound? In the short run, the data probably matter more. In the long run, it just keeps sterling anchored near historic trade-weighted lows. | The contrast between the economy, which fully justifies the market’s belief that rates will rise in August, the politics, which is a shambles, is ever more striking. The Prime Minister has sacrificed aspect of her ‘soft Brexit’ strategy to get legislation through parliament, relying on Brexiteer Labour MPs in the process and damaging her own support in the process. Labour strategists are dreaming that she’ll make the Conservatives unelectable for a decade or more. But does it matter for the pound? In the short run, the data probably matter more. In the long run, it just keeps sterling anchored near historic trade-weighted lows. |
| Investors are clearly taking a back seat as trading begins in Europe. | Investors are clearly taking a back seat as trading begins in Europe. |
| Markets have made an unconvincing start, with the FTSE 100 losing 0.07%, Germany’s Dax up 0.05%, France’s Cac down 0.1% and Spain’s Ibex 0.03% lower. | Markets have made an unconvincing start, with the FTSE 100 losing 0.07%, Germany’s Dax up 0.05%, France’s Cac down 0.1% and Spain’s Ibex 0.03% lower. |
| Despite a fairly pedestrian trading update, Royal Mail is leading the FTSE 100 risers, up 1.7%. But Paddy Power Betfair has lost 2% following a sell note from analysts at Investec. | Despite a fairly pedestrian trading update, Royal Mail is leading the FTSE 100 risers, up 1.7%. But Paddy Power Betfair has lost 2% following a sell note from analysts at Investec. |
| More on the forthcoming UK data. Jasper Lawler, head of research at London Capital Group, said: | More on the forthcoming UK data. Jasper Lawler, head of research at London Capital Group, said: |
| Brexit woes continue to keep the pound range bound, with too may uncertainties still unresolved regarding Brexit; deal or no deal and even over whether Theresa May will be able to cling onto power through the week. However, the UK economic calendar provides at least some distraction from Brexit concerns, this week, although it may not all be good news. | Brexit woes continue to keep the pound range bound, with too may uncertainties still unresolved regarding Brexit; deal or no deal and even over whether Theresa May will be able to cling onto power through the week. However, the UK economic calendar provides at least some distraction from Brexit concerns, this week, although it may not all be good news. |
| UK data out today is not expected to do much to support the downbeat pound, with the employment report forecast to paint a mixed picture of the labour market... UK unemployment is expected to remain constant at 4.2%, and 115k jobs are expected to have been created in the three months to May. Wage growth is expected to remain constant and earnings including bonuses is forecast to have slipped to 2.7% from 2.8% in April. | UK data out today is not expected to do much to support the downbeat pound, with the employment report forecast to paint a mixed picture of the labour market... UK unemployment is expected to remain constant at 4.2%, and 115k jobs are expected to have been created in the three months to May. Wage growth is expected to remain constant and earnings including bonuses is forecast to have slipped to 2.7% from 2.8% in April. |
| The immediate concern for the BoE will be wage growth, particularly given that inflation also continued to decline. These figures are hardly likely to encourage the BoE to vote to tighten monetary policy when it meets in two weeks’ time. With rate hike expectations siting at around 70%, this probability could find it is under pressure and pull sterling towards $1.31, should wages surprise to the downside. On the other hand, should the data reinforce the central bank’s theory that the slow down in the economy was just in the first quarter and that activity is picking up again in the second quarter, the pound could look to target the 50-day moving average at $1.3320. | The immediate concern for the BoE will be wage growth, particularly given that inflation also continued to decline. These figures are hardly likely to encourage the BoE to vote to tighten monetary policy when it meets in two weeks’ time. With rate hike expectations siting at around 70%, this probability could find it is under pressure and pull sterling towards $1.31, should wages surprise to the downside. On the other hand, should the data reinforce the central bank’s theory that the slow down in the economy was just in the first quarter and that activity is picking up again in the second quarter, the pound could look to target the 50-day moving average at $1.3320. |
| At the moment sterling is up around 0.17% at $1.3256. | At the moment sterling is up around 0.17% at $1.3256. |
| 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. |
| With Brexit concerns continuing, the latest comments from Bank of England governor Mark Carney will be monitored carefully this morning. | With Brexit concerns continuing, the latest comments from Bank of England governor Mark Carney will be monitored carefully this morning. |
| Carney and a number of colleagues - Andrew Bailey, Sir Jon Cunliffe and Elisabeth Stheeman - will be giving evidence on the Bank’s financial stability report to the Treasury select committee. Not in parliament as usual but at Farnborough, so at least they will be able to do a bit of plane spotting too. | Carney and a number of colleagues - Andrew Bailey, Sir Jon Cunliffe and Elisabeth Stheeman - will be giving evidence on the Bank’s financial stability report to the Treasury select committee. Not in parliament as usual but at Farnborough, so at least they will be able to do a bit of plane spotting too. |
| The subject of Brexit will inevitably come up, and Carney will no doubt end up commenting on the prospects for a UK interest rate rise in August. | The subject of Brexit will inevitably come up, and Carney will no doubt end up commenting on the prospects for a UK interest rate rise in August. |
| Shortly after Carney and Co begin, there will be more UK data which should help give a little more guidance for the Bank in the shape of unemployment and wages figures. Michael Hewson, chief market analyst at CMC Markets UK, said: | Shortly after Carney and Co begin, there will be more UK data which should help give a little more guidance for the Bank in the shape of unemployment and wages figures. Michael Hewson, chief market analyst at CMC Markets UK, said: |
| The Bank of England will get a final look at how well the UK economy is doing this week starting today with the latest unemployment and wages data. Since the Bank of England deferred a decision on raising rates in May the UK economy has rebounded strongly from the slowdown seen in Q1 with a strong performance seen across all the major sectors, raising expectations that the monetary policy committee may coalesce around a majority decision to raise rates in just over a couple of weeks’ time. | The Bank of England will get a final look at how well the UK economy is doing this week starting today with the latest unemployment and wages data. Since the Bank of England deferred a decision on raising rates in May the UK economy has rebounded strongly from the slowdown seen in Q1 with a strong performance seen across all the major sectors, raising expectations that the monetary policy committee may coalesce around a majority decision to raise rates in just over a couple of weeks’ time. |
| This week’s data could go some further in raising these expectations or dash them completely, unless Bank of England governor Mark Carney performs another one of his reverse ferrets this morning and pours cold water on the prospect when he speaks in Farnborough today, just prior to the release of this morning’s data. | This week’s data could go some further in raising these expectations or dash them completely, unless Bank of England governor Mark Carney performs another one of his reverse ferrets this morning and pours cold water on the prospect when he speaks in Farnborough today, just prior to the release of this morning’s data. |
| Despite all the recent reports of job losses in the retail sector, thus far we’ve seen little evidence of an impact in the headline unemployment numbers, though that could change in the coming months. | Despite all the recent reports of job losses in the retail sector, thus far we’ve seen little evidence of an impact in the headline unemployment numbers, though that could change in the coming months. |
| For now, unemployment is expected to remain unchanged at 4.2%, while on the wages front there has been evidence that the recent rise in the private sector wages has been slowing a touch, though with inflation slipping back to 2.4% we are now seeing wages outstrip prices. This looks set to remain the case in today’s numbers with weekly average earnings for the three months to May expected to fall slightly from 2.8% to 2.7%. | For now, unemployment is expected to remain unchanged at 4.2%, while on the wages front there has been evidence that the recent rise in the private sector wages has been slowing a touch, though with inflation slipping back to 2.4% we are now seeing wages outstrip prices. This looks set to remain the case in today’s numbers with weekly average earnings for the three months to May expected to fall slightly from 2.8% to 2.7%. |
| On the markets, Wall Street ended slightly higher but after the close Netflix shares fell 14% following badly received results. So European markets are expected to make an uncertain start. Analysts at London Capital Group expect the FTSE 100 to open 3 points higher at 7603, Germany’s Dax to open 3 points lower at 12558 and France’s Cac to dip 1 point to 5407. | On the markets, Wall Street ended slightly higher but after the close Netflix shares fell 14% following badly received results. So European markets are expected to make an uncertain start. Analysts at London Capital Group expect the FTSE 100 to open 3 points higher at 7603, Germany’s Dax to open 3 points lower at 12558 and France’s Cac to dip 1 point to 5407. |
| Agenda: | Agenda: |
| 9.00 BST Bank of England governor before Treasury Select Committee | 9.00 BST Bank of England governor before Treasury Select Committee |
| 9.30 BST UK unemployment and wages data | 9.30 BST UK unemployment and wages data |