- Unemployment rises to 4.3% in the three months to September
- Pay growth slows to 4.8%, the lowest in two years
- Vacancies fall for 28th consecutive month
Danni Hewson, AJ Bell head of financial analysis, comments on the latest UK jobs figures:
“This latest set of jobs data puts in black and white what businesses and workers have been feeling. The labour market has been steadily tightening with vacancy numbers falling, redundancies rising and that headline unemployment figure creeping up again.
“Whilst there are still more vacancies than there were before the pandemic, over the last few weeks businesses have been warning that the increase in National Insurance coupled with another chunky hike in the national living wage could result in job cuts. Even before the Budget, uncertainty about what taxes might rise eroded confidence and many employers pushed back investment decisions or halted hiring plans until they could assess the road ahead.
“After the pandemic there was a dash for workers, with businesses that had been shuttered fighting with other businesses for skilled labour. That competition coupled with red hot inflation created an environment where employers were having to dole out chunky wage increases to keep staff on side and in post.
“Whilst wages are still rising, and with inflation tamed for now, those increases are being felt in real terms, but the pace of those increases has slowed to the lowest level in two years. And although the Bank of England will welcome that cooling wage growth, it will have taken a back seat to other concerns when it comes to making the next rate cut decision.
“Expectation that the MPC might deliver a Christmas rate cut has receded and markets are only pricing in a 70% chance of a February cut with the most hawkish 10% thinking that even next May is too early.
“Without a crystal ball predicting the path of inflation is a fool’s errand, especially with so many new factors needing to be priced into any equations. But it certainly feels like supercharged growth is as far away as it ever was.”
