LONDON: Recent weakness in British pay growth likely reflects temporary caution about Brexit among employers, Bank of England (BoE) rate-setter Kristin Forbes said in a newspaper opinion piece published on Thursday.
Minutes from this month’s policy decision said the most recent data on wages had been “notably weaker” than been expected, but Forbes suggested a rebound may be in the offing.
“Although wage growth has been disappointing, this likely reflects temporary caution around Brexit,” Forbes said in an article written for the Daily Telegraph.
Official data on Wednesday showed pay growth, adjusted for inflation, halved to just 0.7 percent, the lowest since October 2014, which was shortly before inflation plunged to just below zero and made it easier for households to cope with slow pay growth.
But inflation is now rising again quickly, pushed up by the post-Brexit slump in the value of the pound.
Forbes, an American academic who is due to leave the BoE in June, was the only member of the nine-strong Monetary Policy Committee (MPC) to vote in favor of raising interest rates this month — the first split between policymakers on rates since last July.
The other eight MPC members all opted to keep the bank rate at a record low of 0.25 percent to help the economy as Britain prepares to leave the EU.
The majority of MPC members flagged signs of slowing consumer spending as one reason for caution on interest rates, but Forbes said this should be seen in the context of strong rates of consumption recently.
“This softening ... should only be moderate, due to support from resilient consumer confidence, solid house prices, low unemployment, and easy access to cheap credit,” she said.
“There are risks consumers could pull back more sharply — but these are still just risks.”
Weak wage growth may reflect temporary Brexit caution: BoE’s Forbes
Weak wage growth may reflect temporary Brexit caution: BoE’s Forbes
Closing Bell: Saudi stocks slip as Tadawul falls 1% amid broad market weakness
RIYADH: Saudi stocks fell sharply on Tuesday, with the Tadawul All Share Index closing down 108.14 points, or 1.03 percent, at 10,381.51.
The broader decline was reflected across major indices. The MSCI Tadawul 30 Index slipped 0.78 percent to 1,378.00, while Nomu, the parallel market index, fell 1 percent to 23,040.79.
Market breadth was strongly negative on the main board, with 237 stocks falling compared to just 24 gainers. Trading activity remained robust, with 164.7 million shares changing hands and a total traded value of SR3.19 billion ($850.6 million).
Among the gainers, SEDCO Capital REIT Fund led, rising 2.73 percent to SR6.77, followed by Chubb Arabia Cooperative Insurance Co., which gained 2.69 percent to SR20.20.
National Medical Care Co. added 1.72 percent to close at SR141.60, while Alyamamah Steel Industries Co. and Thimar Advertising, Public Relations and Marketing Co. advanced 1.57 percent and 1.13 percent, respectively.
Losses were led by Al Masar Al Shamil Education Co., which tumbled 8.36 percent to SR24.65. Raoom Trading Co.fell 6.75 percent to SR64.20, while Alkhaleej Training and Education Co. dropped 6.60 percent to SR18.12 and Naqi Water Co. declined 5.51 percent to SR54.00. Gulf General Cooperative Insurance Co. closed 5.44 percent lower at SR3.65.
On the announcement front, Chubb Arabia Cooperative Insurance Co. signed a multiyear insurance agreement with Saudi Electricity Co. to provide various coverages, expected to positively impact its financial results over the 2025–2026 period. The deal will run for three years and two months and is within the company’s normal course of business.
Meanwhile, Bupa Arabia for Cooperative Insurance Co. announced a one-year health insurance contract with Saudi National Bank, valued at SR330.2 million, covering the bank’s employees and their families from January 2026. Despite the sizable contract, Bupa Arabia shares fell 0.8 percent to close at SR137, weighed down by the broader market weakness.
In contrast, United Cooperative Assurance Co. revealed an extension of its engineering insurance agreement with Saudi Binladin Group for the Grand Mosque expansion in Makkah. The contract value exceeds 20 percent of the company’s gross written premiums based on its latest audited financials and is expected to support results through 2026. However, the stock came under selling pressure, ending the session down 4.51 percent at SR3.39.
