FXStreet (Łódź) - Prashant Newnaha, Asia-Pacific Macro Strategist at TD Securities believes that the drop in the UK unemployment rate stalled in May at 6.6%.
"Another move lower looks like a bit of a stretch to us though, as this particular cohort has already seen its single-month unemployment rate plummet from 8.0% in in Aug 2013 to 7.4% in Nov 2013, and 6.6% in Feb 2014."
"So it’s tough to see it sliding too much lower as a base case scenario, as we’d need to see that cohort’s unemployment rate move another two tenths lower in order to hit the consensus forecast of 6.5% for the headline 3m MA unemployment rate."
"More focus may be on wage growth though, where we also look for a dovish outcome and further weakness. Ex-bonus wage growth will likely retain its 'zero-handle' and slip down to 0.8% Y/Y (mkt also 0.8%), and total wage growth is likely to slide even lower, and we look for a reading of around 0.3% Y/Y (mkt 0.5%)."