DailyFX European Market Wrap: Inflation Starting to Bite UK Wage Growth
Most European markets are gaining in spite of global political pressure while the London bourse is being dragged down by Tesco’s results which dropped after a huge legal bill for overstating its profits in 2014.
Meanwhile, the UK unemployment rate has remained at 4.7%. But inflation is beginning to bite, wiping out wage growth. Average weekly earnings including bonuses increased by 2.3%, which is the same as January last year.
However, UK inflation is now at 2.3% which means there’s no real growth rate anymore. Geopolitics remains the overriding theme in a week of low volumes given that it’s the Easter weekend soon.
US Secretary of State Rex Tillerson is in Moscow meeting his Russian counterpart Sergey Lavrov to discuss the crisis in Syria and the Korean Peninsula. At the same time, the UN is conducting a meeting to address the Syrian conflict.
Both oil and gold have been gaining with tensions in Syria pushing investors towards these commodities: gold because it’s a safe haven and oil because it’s vulnerable to any disruptions in the Middle East.
--- Written by Katie Pilbeam, DailyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.