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Wage growth suggests employers weren’t too fazed by referendum, says Spreadex

Following the UK jobs sector assessments released today (20th July 2016), Spreadex’s senior market analyst, Connor Campbell, has responded:

“It seems that investors are increasingly data hungry post-Brexit, the morning’s UK jobs report, just like yesterday’s inflation figures, having a notable effect on the markets.

“There were a series of surprises in this Wednesday’s assessment of the UK jobs sector. The most eye-catching number was the unemployment rate, which unexpectedly dropped to 4.9% for the first time since 2005. Wage growth wasn’t quite as exciting, coming in as forecast at 2.3%; that is, however, the best number since October’s reading, and suggests that employers weren’t too fazed by the run-in to the referendum.

“Yet arguably the most important figure this Wednesday was the claimant count change reading, the only number out of the jobs report trio to come from June instead of May. Analysts had been expecting a 4.1k jump in those claiming unemployment-related benefits; instead there was only a 0.4k increase in claimants, news that proved to be a huge relief to the pound. Sterling rose just shy of 1% against both the dollar and the euro in the aftermath of the jobs report, climbing back to the levels it abandoned post-inflation reading on Tuesday. The FTSE was less enthused, maintaining its 20-point rise as the pound’s push hampered its growth.

“Looking ahead to the US open and the Dow Jones is set to continue its high-altitude ascent, the futures pointing to a 70-point rise after the bell. That would leave the US index above 18600 for the first time in its history and, even more impressively, would mark an effective 3000-point rise from its February nadir.”

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