The UK labour market continues to present a most unusual combination of high employment but constrained wages, which investors need to consider carefully as they aim to anticipate the official monetary policy response in coming months.

Recent figures on the economy have once again shown record employment and job creation. More than 30.5 million people are now in work, more than a million more than the pre-crisis peak in 2008. But they are earning, in real terms, less than at any time since about 2004 - average earnings have, after adjustment for inflation, been falling for five years, and are now nearly 10% below their peak in 2009.