The slowdown in US wage growth has given stocks in New York the green light to climb higher on opening this afternoon with the Dow Jones advancing 0.7pc in early trading.

Cooling pay growth in the US “takes some of the pressure off” stocks but the labour market continuing to tighten suggests that inflation fears will persist, argued James Ingram of MB Capital.

He added:

“Throw in a potential trade war between the US and the EU and the US economy could be headed for a perfect inflationary storm later this year.

“An interest rate rate hike in March from the US Fed must now be all but nailed on.”