Bank of England (BoE) Governor Andrew Bailey has confirmed that the United Kingdom’s (UK) interest rate cut plan is now on hold for now. Speaking at the European Central Bank (ECB) Forum, he stressed that while macroeconomic indicators are showing a significant cooling, the central bank needs more time to see the full impact of its previous monetary policy tightening cycle.
Bailey also revealed that the UK’s inflation outlook is becoming increasingly complicated due to the “delayed response mechanism” issue to the current global energy cost volatility. However, the BoE’s monetary committee is scheduled to reopen technical discussions on the potential easing of borrowing costs at its July policy meeting.
In the United States (US), the ADP private payrolls processing report revealed that the corporate sector added only 98,000 jobs in June. This seasonally adjusted figure shows a significant decrease compared to May’s data (122,000) and is below the initial consensus forecast of Dow Jones economists who targeted a growth of 110,000 jobs.
ADP Chief Economist Nela Richardson said the slowdown reflects a supply and demand crisis in the labor market, with job seekers now facing longer wait times. The health care and education sectors led the gains with 48,000 jobs, while mining was the only sector to lose 5,000 jobs.
The ADP small-cap data serves as an early projection ahead of the release of the official nonfarm payrolls report from the US government. Wall Street consensus is for the official data to show a gain of 115,000 jobs with the unemployment rate holding steady at 4.3% and average hourly earnings rising 3.5% year-on-year.
