The latest look at the UK labour market has delivered some good news for workers with wages rising faster than forecast even if the unemployment rate did tick higher. Average earnings excluding bonuses increased by 3.2% in September, the fastest pace of growth in a decade and comfortably above the corresponding level of inflation of 2.4% as taken from the Consumer Price Index (CPI). This extends the run of real wage growth which began earlier this year but this positivity is tempered somewhat by an increase in the unemployment rate to 4.1%. In terms of reaction it’s been pretty muted with the pound and FTSE barely budging, with the markets seemingly waiting with bated breath for the latest Brexit developments.
Brexit deal close?
There’s more positive noises coming out of Whitehall on the Brexit front this morning with PM May’s deputy saying that a deal is “almost within touching distance.” This comes shortly after the EU Chief Negotiator Barnier claimed that a treaty was almost ready yesterday afternoon and both sides are clearly trying to talk up the prospects of reaching an agreement. However, these latest remarks seem to be just another way of rephrasing claims by PM May last week that a deal was 95% done, and while the bulk of a deal is no doubt in place, the parts which aren’t still represent a significant stumbling block. Chief amongst them is the Irish backstop and Theresa May still finds herself in a position that is unacceptable on both fronts. A cabinet meeting today could well yield a breakthrough domestically but if there’s no real positive developments in the next 24-48 hours then a November summit with the EU can all but be ruled out and the negotiations will lurch ever closer to the edge of the proverbial cliff.