0832 GMT - The impact of the forthcoming rise in U.K. employer national-insurance contributions and the national living wage could prompt the Bank of England to speed up interest-rate cuts in the second half of the year, Abrdn's Luke Bartholomew says in a note. For now, rate cuts will remain gradual after data Tuesday showed average pay growth picked up to 5.9% at the end of 2024, he says. However, the big test will be how the labor market reacts to the changes announced in the government'sautumn budget. There are "clear signs" that hiring intentions have cooled in anticipation, he says. "If growth remains very sluggish there is a clear path to more rapid rate cutting in the second half of the year." (jessica.fleetham@wsj.com)
(END) Dow Jones Newswires
February 18, 2025 03:33 ET (08:33 GMT)
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