TD Securities strategists expect United Kingdom (UK) labour market data for February to show stabilisation, with a slight dip in unemployment and moderate job gains. Wage growth is forecast to slow across key measures, aligning with consensus. As the figures pre-date the Iran conflict, the bank argues they will allow the Monetary Policy Committee (MPC) to concentrate more on inflation expectations than on current pay dynamics.

Pre-conflict data point to steady jobs

"The UK labour market is showing signs of stabilisation and we expect that to continue in February. After a period of steady loosening, the pace is set to level off, with the unemployment rate ticking down to 5.1% (mkt: 5.2%; prior: 5.2%) and jobs being added at a measured pace of 50k (mkt: 35k; prior: 84k) into the start of the year."

"Wage growth should slow across all measures, with our forecasts for AWE, AWE ex. bonus, and private earnings growth at 3.6% 3m/y, 3.5% 3m/y, and 3.2% 3m/y, respectively (all in line with consensus)."

"Given that this is pre-conflict data and the lagging nature of labour market, these signs of stabilisation would simply allow the MPC to focus less on current pay and more on inflation expectations in response to the Iran conflict."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)