Kevin Brown, Savings Specialist comments on todays Labour Market data
"While the Bank of England will be encouraged that total earnings fell month-on-month, the ongoing conflict in the Middle East means that a rate rise – and perhaps two – is still on the table for 2026 (1).
“The worry is that if there is not a resolution soon, the disruption to global supply chains could hit consumers in the pocket. That would be bad under normal circumstances, but it’s devastative when you consider that persistently elevated inflation since the pandemic means that the cost of living is up around a quarter in the past five years (2). This is why many households still feel squeezed, even if it is not reflected in the headline numbers.
"Whether the Bank acts on interest rates next month (3) remains to be seen. Regardless, households should be preparing for an environment in which both rates and the cost of living are higher, which means building up a financial buffer and making sure their money is working as hard as possible. That means either switching to a better savings rate or putting their money to work in the markets, where the potential returns are higher."
(2) Source: https://www.in2013dollars.com/uk/inflation/2021?amount=100
(3) Source: https://www.bankofengland.co.uk/monetary-policy/upcoming-mpc-dates