There hasn’t been much economic data over the last few days, but one part of the UK Employment report certainly made me sit up and take note. The reading for Average earnings including bonuses on a year on year basis continues to plummet. Down from 3.2% y/y in December to an astonishing 0.1 % y/y in February. This can be attributed to an economy which is obviously not paying any bonuses, but the reading not including bonuses also hit a record low. With labour markets throughout the Global economy expected to shed more workers this trend will surely only intensify, meaning that deflation isn’t entirely out of the question.
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