London’s blue-chip shares fell in morning trading as the latest UK jobs data reaffirmed traders’ growing suspicions that an interest rate rise was around the corner.
Britain’s labour market is at its tightest for 40 years with a record 1.1 million job vacancies. The worry for the Bank of England is that, amid the battle for workers, pay will rise which, in turn, will make inflation more persistent than it had predicted.
As a consequence, economists think that today’s jobs data adds weight to the argument that the Bank will look to raise interest rates in December as it attempts to keep inflation in check.
That spooked the FTSE 100 this morning, with traders anxious that an early rate hike may threaten the post-pandemic