Surging UK wages ease recession fears

Last week, poor Brexit-driven second-quarter growth numbers put the UK economy on recession watch over the summer, something yesterday’s jobs and wage data will have helped put to rest.

Employment rose by a consensus-busting 115,000 in the quarter to June, and posted the biggest gains since February. Headline wage growth, excluding bonuses, hit an 11-year high of 3.9pc, suggesting that consumer demand should be strong enough to keep the British economy ticking over.

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The gains in employment all came from part-time jobs, which were up 118,000 over the quarter.

“It is encouraging that firms have continued to add to their workforce, suggesting they expect activity to pick up again following the Brexit hangover in Q2,” said Capital Economics UK economist Andrew Wishart.

The battered pound took a breather, trading modestly lower, along with other so-called ‘risky currencies’, and still close to two and a half year lows against the dollar.

By midday, sterling was 0.1pc lower, at $1.2066, and little changed against the euro, at 92.79 pence.

With less than 60 days to the October 31 Brexit deadline and the election drums beating louder over the water as prime minister Boris Johnson announces a series of policies that show a tough stance on law and order, traditionally an appeal to core Conservative and older voters, the pound may kick lower again soon.

Investment bank ING puts the odds of a no-deal Brexit come the end of October at 25pc, and the odds of a UK election and the pound falling to 95p to the euro at 40pc.

A poll from ComRes for the ‘Daily Telegraph’ showed a surge in support for the Conservative Party since Mr Johnson took over as PM, and that 54pc of those polled wanted Brexit ‘by any means’.

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