UK pay growth slows before crunch interest rates decision

AI desk brief

UK pay growth cooled to 3.9% in the three months to July from 4.1% in June, while payrolls and vacancies continued to soften, reinforcing the case for a steadier Bank of England stance at Thursday’s meeting. Markets largely expect Bank Rate to stay at 3.75%, though the article notes a small risk of a 25bp hike if inflation pressures from higher energy prices intensify.

The key metals takeaway is the mixed rates/inflation setup: weaker labour data argues against further tightening and would normally support gold, but Brent above $107/bbl and an expected UK inflation rise above 3% keep the risk of stickier real rates and firmer gilt yields in play. Near term, the signal is mildly constructive for precious metals if growth concerns dominate, but not a clean bullish catalyst.