“Today’s data is unlikely to warrant an interest rate cut by the Bank of England as wage growth remains elevated and uncertainty around the potential effects of increased labour costs continues. The MPC will likely continue with caution and keep rates unchanged this afternoon.
"While pay growth was unchanged at [5.9%] in January, the upcoming increases in the National Living Wage and employers' National Insurance Contributions present an upside risk to the outlook for pay growth. These changes could see pay pressures remaining elevated over the coming months, constraining the extent to which the Bank can cut interest rates this year.
“Headline unemployment stood at [4.4%] in the three months to January. Unemployment has stayed relatively stable in recent months, despite a notable decline in business sentiment and hiring intentions. Sentiment is likely to weaken further if global trade frictions intensify over the coming months, which could lead to a continued decline in hiring intentions and an increase in unemployment.”
