16 April 2024
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 labour market figures from the Office for National Statistics reveal the unemployment level rose to 4.2% in the three months to February 2024, up from 3.9% in the three months to January 2024 and higher than had been expected. Meanwhile, there was further evidence of a slowdown in wage growth. While annual growth in total earnings including bonuses remained stagnant at 5.6%, annual growth in average regular earnings dipped to 6%.
“This uptick in unemployment, coupled with gradually falling wages, is indicative of a sluggish economy. The UK is expected to have already pulled itself out of the recession it entered at the end of 2023, and the labour market is still yet to show the level of slowdown that typically comes with a recession, but the level of growth in the economy is nothing to be excited about.
“There is still some concern over the reliability of this data, so the Bank of England may have to take the figures with a pinch of salt. Nonetheless, it will be pleased to see that wage growth is getting closer to its 2% target which should also help inflation continue its path back down. However, this morning’s figures suggest that the labour market is beginning to see a real impact from the current level of interest rates, and the Bank will have a careful balancing act ahead of it in ensuring inflation gets back down to target without over-tightening and inflicting too much pain on the jobs market.”
