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2025-12-19 00:58:58
[Franklin Templeton: Bank of England's 5-4 Rate Cut Decision Reflects Conflicting Private and Public Sector Employment Data] In a report, Franklin Templeton strategist Michael Brown noted that the Bank of England's narrow 5-4 rate cut decision on Thursday reflected conflicting indicators in private and public sector employment data. "Wage conditions reveal the truth: private sector wages grew by only 3.7% year-on-year (slightly above inflation), while public sector wages surged by 8.1%," he said. He added that since March, private sector wage growth has slowed from 5.6%, while public sector wage growth has accelerated from 4.9%. He believes this explains the 5-4 vote and the slow pace of rate cuts. Franklin still expects inflation to fall below 2% in the second half of the year, meaning the market anticipates more than two rate cuts. He stated that if public sector growth slows, interest rates could fall to 2.5%.
