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In the view of the analysts at TD Securities (TDS), the UK ILO Unemployment Rate is likely to tick higher in December while the wage growth to lag.

Key Quotes:

“While the Bank of England’s last MPR looks for the unemployment rate to stay unchanged at 3.8% for the next 3-4 months, we look for an uptick to 3.9% in December (mkt 3.8%), with the potential for another pop higher in January.

For wage growth we look for the recent pattern of deceleration to continue, with headline wage growth slowing to 3.0% y/y (mkt 3.0%), and private sector regular pay to 3.3% y/y (mkt: 3.3%).

For the latter measure, the short-term trend growth rate has more than halved from a peak of 5.0% on a 3m/3m annualized basis in July to 2.2% as of November.”