17 January 2023
If you are covering the latest UK labour market statistics, please see the following comment from Richard Carter, head of fixed interest research at Quilter Cheviot:
“This morning’s jobs data from the ONS highlight the tricky balancing act the Bank of England continues to face in its monetary policy plans. Ahead of tomorrow’s UK inflation figure, wage growth edged up to 6.4% in September to November 2022 compared to 6.1% seen in August to October, reinforcing the inflationary pressures in the economy, while unemployment stayed flat at 3.7%.
“With the Prime Minister focused on boosting economic inactivity in the UK, he will be mildly pained to see the rate of economic activity decreased by 0.1 percentage points on the quarter to 21.5% in September to November 2022. Given the number of job vacancies remains at the historically high level of 1.16 million, only time will tell if the PM’s plans, which are rumoured to target the over 50s as well as those who are currently out of work due to illness or disability, will provide the necessary antidote to the UK’s productivity puzzle.
“Against the backdrop of widening strike action, total and regular pay both fell by 2.6% over the year in real terms further squeezing living standards. And the difference between private sector and public sector wage growth remains stark, with private sector pay up 7.2%, while public sector is up by 3.3%.
“Labour market conditions remain very tight, and with employment levels still lower than they were pre-pandemic, it is high time the government acted to help address the ongoing issues – particularly as the chance of an official recession remains touch and go.”
