- Unemployment ticks up to 4.4% in the three months to November
- Regular pay surged by 5.6%, or 3.4% when adjusted for inflation
- Vacancy numbers fell for the 30th consecutive month
Danni Hewson, AJ Bell head of financial analysis, comments on the latest UK jobs figures:
“On the face of it the latest UK jobs figures create something of a headache for the Bank of England. For the first time since summer 2021 wage growth really feels like wage growth, with the average earner enjoying a 3.4% boost as inflation cooled.
“Skilled labour is worth its weight in gold and the private sector is still willing to pay to keep valued employees on side and on the books.
“All that extra wiggle room in many households’ budgets means people have been prepared to spend a bit more on the things they really want, and with Mr Kipling maker Premier Foods noting that the switch back to branded goods has continued over the last quarter it seems people are keen to regain their standard of living.
“The potential impact on inflation is clear but the flipside shows a weakening labour market, fewer vacancies and a rising number of those unemployed and claiming benefit. Markets therefore still feel comfortable that the MPC will see through this lot of wage data and deliver a rate cut at the February meeting.
“There has been a lot of talk about the reliability of ONS labour market statistics and there remain concerns, but like much of the data we pore over every month these figures are backwards looking and even the most reliable data sets can’t give us the true picture of what’s happening in boardrooms and HR departments up and down the country.
“Post Budget we saw the biggest drop in payrolled employees since the pandemic, but it won’t be until the autumn that the real impact of an uplift to employer NI and increase to the National Living Wage will really be evident as businesses flex to deal with those changes.
“Recruiters and surveys suggest businesses are already reassessing hiring intentions and cutting back plans to expand their workforce, whilst workers are less likely to be considering a move even if it’s to chase more money.”
