UK Labour Market: job creation fails to heat up over the summer
Nicholas Hyett, investment manager at Wealth Club said: “On one level this data shows a stable labour market performing as expected – albeit not particularly strongly. Unemployment is holding steady and in line with expectations, while wages continue to rise faster than inflation.
However, underneath that there are some worrying signs. Vacancies have fallen by 10,000 in the quarter to August, a 38th consecutive fall, and is less than half the number of people currently claiming unemployment benefits. With the estimated number of work force jobs also falling, it looks like the UK economy is simply not creating enough jobs and that problem is slowly worsening.
With wages rising faster than inflation, and inflation itself still high, it seems unlikely the Bank of England will ride to the rescue with interest rate cuts in the near term. This is not the pro-growth economy the government was hoping for when it was elected, and there is a real danger that economic conditions continue to cool as we go through autumn.”