UK wage growth still too high for BoE, Biden tests positive for Covid
UK wage growth slowed to economist predictions of 5.7% in May, but remain too high for the BoE to consider a rate cut for August, as unemployment remained at 4.4%.
Traders now see just a one in three chance of a reduction in rates from the Old Lady, after yesterday’s stronger than expected inflation report, where Sterling punched through yearly highs against the Dollar and continued its recent good form over the Euro.
The data comes after PM Keir Starmer revealed his plans for government would “take the brakes off Britain”, as King Charles unveiled the first Labour Government in 14 years during his speech in the House of Lords. Some of the highlights of the legislation are focused on housing and infrastructure, alongside plans to publicise the Railways. With labours large majority we can expect the bills to be easily passed through parliament.
President of the European Commission Ursula Von Der Leyen seeks a second term today as EU lawmakers hold vote this afternoon. The decision comes after turbulent elections in France and other far- right challenges across the bloc. A second term would offer some welcomed stability for the EU, with Von Der Leyen’s key support for Ukraine set for a collision course if former President Trump were to win in November.
Meanwhile, ECB president Christine Lagarde also announces the Central Banks crucial interest rate call, where a hold in rates is widely expected. After a cut in June and with inflation still not quite where Frankfurt requires, some 80% of economists anticipate just two further rate cuts this year arriving in September and December. ?
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81 year old President Joe Biden, already under significant pressure to step away from his re-election campaign has tested positive for Covid whilst visiting Las Vegas on the campaign trail. The diagnosis comes at a bad time for Biden, who has been losing ground in battleground states as Trump continues to headline the Republican National Convention in Milwaukee.
Biden continued his defiance in a TV interview later confirming that he feels in better shape than Trump, and that whilst he sees no reason to step aside, his running mate Kamala Harris could well lead if required.
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