Leading Indicators | Robust wage growth, PMI stability, and global geopolitics
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Here we look at the leading indicators in the world of economics.
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UK wage growth remains strong
The UK unemployment rate edged up to 4.4% in November, from 4.3% in the month prior. Private sector wage growth, a measure closely monitored by the Bank of England for indications of a tight labour market, rose to 6.0%, up from 5.5%, and above the BoE’s forecast of 5.1%. Markets are now pricing in three quarter point rate cuts over the coming year.
Modest activity growth in PMI’s
The UK services PMI climbed to 51.2 in January, up from 51.1 in the month prior, marking its fifteenth consecutive month in expansionary territory. Meanwhile, the UK manufacturing PMI rose to a three-month high of 48.2, exceeding market expectations of 47.0.
Global geopolitical risk rises +19% m/m
President Donald Trump's return to power introduces notable uncertainty, particularly with his use of tariffs as key policy tools. However, the recent US-Colombia trade deal agreement illustrates how these measures might increasingly be leveraged as strategic negotiation tactics. Meanwhile, the geopolitical risk (GPR) index rose by +19% m/m in December, reaching its highest level since August.
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