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The latest updates and articles from Arbuthnot Latham
The UK jobs market remains resilient with the number of workers on payrolls now above pre-covid levels, and job vacancies at an all-time high.
UK inflation expectations have hit a 13-year high, with the market increasing bets that the Bank of England will raise interest rates to 0.75% by the end of next year.
The UK economy grew by a stronger than expected 5.5% in the second quarter but is still 3.3% smaller than it was pre-pandemic.
The Bank of England kept monetary policy on hold as expected, but the debate is intensifying on the need to begin tightening, as the committee attempt to balance rising inflation against slowing growth.
UK inflation surged to 3.2% in August, its highest level in nine years, though much of the upward pressures are likely to prove temporary.
Bank of England officials were relatively optimistic on the economy this week, as they remain focused on inflation, and how the jobs market performs once the furlough scheme ends at the end of this month.
Market focus today is on the critical US jobs data and how this may affect the timing of US monetary policy action.
Market focus today is on the Jackson Hole economic forum, with US central bank chair Jerome Powell speaking later.
UK Job vacancies hit a record high of 953,000 in the three months to July.
The UK economy grew by 4.8% in the second quarter as lockdown restrictions were gradually eased and the recovery gained momentum.
The Bank of England kept monetary policy on hold as widely expected but said interest rates may need to increase over the forecast period, and they will begin unwinding QE once the benchmark rate reaches 0.5%.
The Bank of England meet next week and are likely to keep monetary policy unchanged, as they balance higher inflation and the economy generally recovering strongly, against the huge risks the virus continues to pose.
Ruth Lea CBE
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