Rate cut looks further off as unemployment eases

SLOWING wage rises and easing unemployment were revealed in a slew of official figures today, which pushed back the likely timing of the next interest cut.

- Michael Hunter

But there was also a reminder of the finely balanced nature of the Threadneedle Street decision.

It came from reports warning the UK is facing a wave of job losses over the rest of September and on into the autumn, when the monetary policy committee is expected to take rates under 5% with a quarter-point cut to 4.75% in November.

The City refined its outlook for action from the MPC after the national unemployment rate for July dropped to 4.1%, down from 4.2% and in line with forecasts. There were also 23,700 more people claiming unemployment benefits in the three months to the end of July, down from more than 102,000.

Meanwhile, average earnings growth eased to 4.0%, down from 4.6%, and under the 4.1% expected in City forecasts.

Both sets of numbers, from the Office for National Statistics, looked to give BoE Governor Andrew Bailey and his colleagues on the MPC more time to act as they bring the base cost of borrowing down.