13 December 2022
If you are covering the latest UK labour market statistics, please see the following comment from Marcus Brookes, chief investment officer at Quilter Investors:
“This morning’s UK unemployment data highlighted the dilemma facing the Bank of England ahead of their rate-setting meeting this week. On the one hand, wage growth picked up to 6.1% which will reinforce the strong inflation pressures in the economy but on the other, unemployment rose slightly to 3.7% which could increase their concerns about a slowing economy.
“We expect them to raise rates by 0.5% on Thursday but the pace of rate hikes is likely to slow from now on given the weakening economy.
“Against the backdrop of a new winter of discontent as the nation's front line takes to the picket line, total pay in real terms pay and regular pay both fell by 2.7%. However, the gap between private and public sector pay narrowed slightly, with private sector pay up 6.9%, while public sector pay is up by 2.7%.
“With the Bank of England already fearing the country is in a recession, labour market conditions remain tight with fewer foreign workers and increased hesitancy among people to take up new roles due to increased economic uncertainty. With employment remaining lower than it was before the pandemic, the UK is badly lagging its peers in developed economies and may be in need of a policy boost to fix its labour market conundrum and get more people who are economically inactive back into work.”
