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Markets edgy ahead of UK jobs and wages report – business live


People queue to enter a job centre in east London.

People queue to enter a job centre in east London. Photograph: Daniel Leal-Olivas/AFP/Getty Images

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Today we discover whether Britain’s labour market is holding up, in the face of Brexit deadlock and global trade war.

New unemployment figures are expected to show that the jobless rate remained at just 4%, the lowest in around 43 years.

But crucially, economist want to see wages outpacing inflation again. Last month, basic pay growth jumped to 2.9% per year – the fastest in over three years, while total pay growth was 2.6% higher. Similar figures are expected today (for the three months to August).

Strong pay growth would suggest that workers were finally getting the upper hand over bosses, and taking advantage of the tight labour market.

Jasper Lawler of London Capital Group says the unemployment report will give the City a welcome distraction from the UK government’s negotiations with the EU (and itself).


Brexit developments are expected to remain the key driver of the pound; however, for a few fleeting minutes traders will turn their attention to UK jobs data.

Unemployment is forecast to remain constant in August at 4%. Weekly earnings are expected to remain steady at 2.9% in the 3 months to August. It will take a significant beat to the upside to inject some optimism into the pound. On the other hand, any weakness in the figures could drag on the pound given the downside risks of Brexit already making the pound sensitive.

Also coming up today

The financial markets remain edgy following last week’s losses. Over in Asia, Chinas Shanghai composite index has dropped by almost 1%, but Australia has gained 0.5% while Japan’s Nikkei is up 1.2%.

Traders are still anxious that we could see further losses, after Wall Street endured its biggest fall since March last week. Fears over US interest rate moves, trade, the oil price and the health of the global economy all abound.

Stephen Innes of trading firm OANDA explains:


Regional markets are trading more positively this morning as overall regional volatilities are falling. A weaker US dollar profile is helping to cool depreciation pressure on the Yuan as overextended shorts are getting pared.

Don’t confuse this recovery with anything other than consolidation amidst a protracted downtrend in Asia equities. Traders are looking to sell upticks given that intraday volatility can ignite on the drop of a dime.

Italy’s government has submitted its 2019 budget plans to the European Union, teeing up a likely clash over its spending plans.

The budget includes running a deficit of 2.4% of GDP – higher than the EU target – plus lowering the retirement age and giving more help to poorer families.

Anne-Sylvaine Chassany
(@ChassNews)

Italy’s coalition approves draft budget before EU deadline via @FT
https://t.co/Eduuxx3fVE


October 16, 2018

Plus, Goldman Sachs and Morgan Stanley will be reporting financial results.

The agenda:

  • 9.30am BST: UK unemployment data
  • 10am BST: ZEW survey of German business confidence
  • 2.15pm BST: US industrial production figures





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