European stocks and the FTSE 100 are restless this morning as the European Central Bank (ECB) makes its decision on interest rate cuts. Global chip stocks plummeted last night, with the US allegedly discussing tightening exports of advanced semiconductor technology to China.
Global Markets Await Interest Rate Verdict From European Central Bank
The UK Office for National Statistics (ONS) reported that wage growth is at its lowest since the record-low 5.4% in August 2022. This year’s wage growth is at 5.7%, a steady decline from 5.9% last year. Annual bonuses are at 5.7%, according to the ONS. To add fuel to the fire, the closely monitored private-sector wage growth also slowed from 5.9% to 5.6%.
The ONS’s director of economic statistics, Liz McKeown, stated:
We continue to see overall some signs of a cooling in the labour market, with the growth in the number of employees on the payroll weakening over the medium term and unemployment gradually increasing.
McKeown’s sentiment matches the cooling labour market and restless global markets that are waiting to hear from the Bank of England (BoE) in two weeks’ time. The risk of inflation – as seen in the cooling labour market – suggests that the BoE’s plan to cut rates from their 16-year highs of 5.25% could be delayed.
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Markets have voted on a 40% probability that rates will be cut, a slightly stronger view than the 35% probability vote collected yesterday. Quilter Investors strategist Lindsay James suggested that “September may be a more reasonable expectation for an initial easing of monetary policy.
