17 July 2025
If you are covering the latest UK labour market statistics, please see the following comment from Lindsay James, investment strategist at Quilter:
"Today’s labour market data from the ONS shows the UK economy continuing to lose momentum. Unemployment now stands at 4.7%, slightly up, while the number of payrolled employees fell by 135,000 compared to May 2024. Regular pay excluding bonuses grew by 5.0% year-on-year.
"The figures reinforce recent signals from business surveys that hiring conditions are softening in the wake of the employer National Insurance changes. Recruiters have reported falling vacancy levels, rising candidate availability, and weaker wage pressures, all of which point to a jobs market that is gradually rebalancing after a period of acute tightness.
"The Bank of England will be watching these numbers closely, especially in light of yesterday's inflation print, which showed a slight uptick in headline CPI to 3.6%. While the rise was modest, it muddies the waters for the Monetary Policy Committee, which has been looking for clear signs that inflationary pressures are easing before cutting rates.
"Governor Andrew Bailey recently flagged emerging slack in the labour market, and today’s employment data may add weight to that view. However, the inflation figures suggest that price pressures, particularly from transport and housing, remain uneven, complicating the timing of any policy move.
"With inflation still above target but labour market conditions loosening, the Bank faces a delicate balancing act. Markets had been increasingly pricing in a rate cut as soon as August, but yesterday's inflation surprise may temper those expectations."
