UK labour report was stronger than anticipated

The UK labour report was stronger than anticipated with the u-rate falling to 5.5% (5.6% expected), employment growth picking up 42k in the last 3 months, and perhaps most importantly, avg. earnings up 2.9% 3m/y, including and excluding bonuses. Later, at the Treasury Select Committee hearing, Carney and the other MPC members overall reiterated their more hawkish tone of late. Generally, they acknowledged that risks from EM have risen, but not enough to alter their view that rates should rise in the coming months. Carney repeated his mantra of the likely decision on rates coming "around the turn of this year". Next up for UK data are Aug. retail sales this afternoon.

"Our economists are looking for another month of strong gains in line with signals from consumer confidence surveys. We look for firm growth of 4-4.5%y/y in volume terms and 2-2.5% y/y in value terms", notes RBC capital Markets.