Business failures on the rise in England and Wales; Interest rate hike less likely as UK wage growth accelerates - Business Live
Wage growth in Britain has reached 5.2% year-on-year, prompting the Bank of England to leave interest rates unchanged on Thursday.
Bank of England rate cuts now less likely
City traders are scrambling to readjust their expectations of a UK interest rate cut after wage growth accelerated this morning.
Money markets now show there is just a 7% chance the Bank of England will cut interest rates on Thursday, down from around 15% yesterday.
Markets are no longer expecting three cuts next year. The bank rate, currently at 4.75%, is now expected to fall to around 4.1% by December 2025, meaning only two quarterly rate cuts have been fully priced in.
It was expected to fall closer to 4% yesterday, which would imply a three-quarter rate cut next year. Ashley Webb, UK economist at Capital Economics, believes that the wage data released today will do little to distract the Bank from its concerns about high inflation, explaining:
October's rise in stable private sector wage growth will reinforce the Bank of England's concerns about a pick-up in inflation despite the news of weak activity.
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