- Unemployment holds steady at 4.7%
- Vacancy numbers slide for the 38th consecutive period
- Pay growth is slowing but still outpacing inflation
Danni Hewson, AJ Bell head of financial analysis, comments on the latest UK jobs figures:
“There’s a lot to unpack in this latest set of UK jobs figures and the headline unemployment rate, which held steady, masks a cooling trend that will be unsettling for many workers.
“As vacancy numbers continue to fall, albeit at a slower rate, opportunities for new starters and potential movers decline, with many businesses stating that they’re putting recruitment and investment decisions on hold as they wait to see what surprises might lurk in November’s Budget.
“That shift will change the dynamics of ongoing and future pay discussions and we’re already seeing pay growth slowing to its lowest level in more than three years. It is still outpacing inflation, but the percentage of extra pennies going into people’s purses in real terms eased back to just 1.2% as prices edge determinedly up.
“This trend will be closely watched by Bank of England rate setters. Although markets aren’t pricing in a cut this week, this softening opens up the potential for one more rate cut this year.
“A robust labour market is both a symptom and a cause of economic growth – the growth that makes us all feel better off and more confident about spending – creating a delicious cycle of demand and supply.
“At the moment the most positive adjective that could be used is ‘resilient’, which is okay as long as the cooling trend can be quickly addressed and reversed.”
