The labour market is dancing to its own tune as the latest figures suggest it remains tighter than anticipated. With a remarkably resilient labour market, falling unemployment and slowing wage growth, we could be entering a Goldilocks scenario for the UK economy. However, these mixed signals may present a challenge for the BoE when it comes to deciding its next policy moves. The cooling wage growth offers a glimmer of hope for those anticipating interest rate cuts.

However, the tight labour market, as evidenced by falling unemployment and strong job creation, may give policymakers pause. The central bank now faces a delicate decision, with market expectations leaning towards at least one more rate cut this year, but the resilience of the labour market could complicate this outlook. UK equity markets may see modest gains with the job market buoying confidence, however gilt yields are likely to edge lower due to cooling wage growth, reflecting easing inflationary concerns.