UK: Dismal economic releases - BBH

Analysts at BBH point out that last week's economic news from the UK was dismal as each of the three PMIs were weaker than expected.  

Key Quotes

“Real sector data was equally poor.  Industrial production and manufacturing output unexpectedly fell in May, while the trade deficit deteriorated and house prices softened. This week's main report is an update on the labor market.”

“While job growth has recovered from the soft patch at the end of last, wage growth appears to be slowing.  The growth rate of average weekly earnings on a three-month year-over-year basis is expected to slow to below 2% for the first time since in more than two years.  Excluding bonus payments, average weekly earnings may firm after falling to 1.7%, matching their slowest pace since October 2014.”

“Looking at the short sterling futures market and the OIS, it appears no one is taking seriously the apparent threat of 3 dissenting hawks and Haldane that more accommodation has to be removed.  Recall the FPC recently hiked the counter-cyclical capital cushion that had been set at zero shortly after last year's Brexit referendum.  Sterling appears vulnerable.  The recent advance toward $1.30 again seems to be a more a reflection of US dollar weakness than fear of a BOE rate hike.  The euro has risen against sterling in nine of 11 weeks.  Since the mid-May, only the yen among the majors has been weaker than sterling.”