[LONDON] Britain’s weak jobs market saw employers shed more workers last month, according to figures released ahead of the Bank of England’s latest interest rates decision on Thursday (Sep 17).
The number of employees on company payrolls slipped 26,000 in August after a downwardly revised 19,000 fall the previous month, the Office for National Statistics (ONS) said on Tuesday (Sep 15). It was worse than the 5,000 drop that economists expected.
Demand for workers remained tepid with job vacancies falling 8,000 to a fresh five-year low of 702,000. Unemployment held steady at 4.9 per cent in the three months through July, though the ONS has cautioned that the estimate is still affected by a quality issue with the collection of that data.
The figures suggest the UK remains stuck in what Bank of England Governor Andrew Bailey has called a “low hire, low fire” economy. UK employers face heightened uncertainty from the US-Iran conflict and the first budget under Prime Minister Andy Burnham, set for Oct 28.
The ONS said wage growth excluding bonuses was unchanged at 3.5 per cent in the three months through July.
A lacklustre labour market has so far eased nerves among most BOE rate-setters, as it reduces the chance of second-round inflation effects seeping into the UK economy. However, concerns over the outlook for prices are mounting after oil prices climbed above US$109 per barrel on Monday. Traders increased their bets on rate hikes, pricing in as many as five by the end of next year. BLOOMBERG
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