UK wage growth slows, but employment stays at record high – business live

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Today we learn how Britain’s labour market is faring, as the warning lights flash on the UK economy.

Overnight, recruitment firm ManpowerGroup has reported that company bosses are at their most pessimistic since 2012 — due to worries over Brexit and the high street slowdown.

My colleague Richard Partington explains:

Watched by the Bank of England and the government for early warnings of hiring spurts or downturns, the quarterly poll of about 2,000 major employers from nine different industry sectors across the UK found a net balance of only 4% planning to hire more staff rather than cutting back.

The weakest outlook from the survey was reserved for the banking and finance industry, which recorded the worst outlook since the depths of the financial crisis almost a decade ago, suggesting job cuts may be on the way over the summer.

With manufacturing output hitting a six-year low yesterday, and construction output also disappointing, the economy appears to be at its weakest point since the eurozone crisis was raging six years ago.

So, today’s unemployment figures will be scrutinised for signs of weakness.

Economists are expecting the jobless rate to remain at 4.2% in April, a 43-year low, with basic pay rises unchanged at 2.9%.

But, the number of jobs created over the last quarter could drop to around 110,000, from 197,000 in the three months to March. That could signal that the labour market is cooling.

Adam Cole of Royal Bank of Canada explains:

Even though there have been a number of large surprises to the upside in the employment data over the last six months, it will be very difficult for gains in employment to match last month’s very strong +197k 3/3m.

For the unemployment rate, we expect it to remain at 4.2% for a third consecutive month. As ever, average wages will be the more closely watched measure, but on this occasion we don’t expect major changes and look for the excluding-bonus measure to remain 2.9% 3m/yr.

Also coming up today

It’s a big day for Brexit, as parliament votes on an amendment to give MPs give parliament a meaningful vote on the final deal.

This would put the House of Commons in charge if MPs were to reject the government’s final divorce deal was rejected by MPs into the hands of the Commons. It aims to avoid MPs facing a choice between the government’s deal or no deal, but Brexiters fear it could lead to a second referendum.

Sterling could be volatile if Theresa May fails to block the amendment.

We also get the latest American inflation figures. The annual US CPI is expected to rise to 2.7%, from 2.5% in May, as the cost of living accelerates.

The US Federal Reserve is already expected to raise interest rates tomorrow, following a two-day meeting starting today.

The agenda

  • 9.30am BST: UK unemployment statistics
  • 10am BST: ZEW survey of eurozone economic sentiment in June
  • 1.30pm BST: US CPI inflation for May

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