UK headline earnings growth should continue to rise

The labour release should report that the LFS unemployment rate held steady at 5.4% in the three months to September but the more timely claimant count data for October is likely to show a rise of 5k, which would be the third consecutive monthly increase and remind us that the underlying pace of employment growth is weakening. 

Nevertheless, the output gap is shrinking - the BoE Staff estimate of the long term equilibrium unemployment rate is "around 5%" - and that should lead to a continuing increase in total earnings growth from 3.0% to 3.3% 3mth yoy in the 3 months to September. Regular pay growth should, however, be stable at 2.8%.