Analysts at Citi forecast that yesterday’s average earnings figures “will preclude a deceleration away from a ‘forceful’ policy response before March” by the Bank of England.
The broker pointed out that wage growth once again surprised to the upside with regular pay coming in 20bps above both its and consensus expectations.
This reflected both a "genuine" upside surprise on the month and upward revisions to the back data, the bank noted.
Private sector regular pay is also now 40bps above the Bank’s forecast for quarter four, Citi pointed out.
“We think this suggests strong continued backing for a second 75bps among a minority on the MPC.”
The broker said it now sees an additional 25bps hike in May as more likely than not with pass through from weaker demand into low pay growth likely to remain attenuated through the first half of 2023.