Britain’s unemployment rate has hit 5 per cent – the highest level since the pandemic. Figures, just released by the Office for National Statistics (ONS), also show 117,000 payrolled jobs wiped out in the last year. The hiring slowdown seems to be getting worse as what was initially a reaction to the Chancellor’s £25 billion raid on employer National Insurance now turns into fears about the coming Budget.
Meanwhile, wage growth continued to ease, although it still remains well above inflation. Wages were up 4.8 per cent across the economy compared to last year, with pay rises doing considerably better in the public sector.
However, if wage growth slows again this month then it could mean we see a rate cut from the Bank of England just in time for Christmas. Last week they voted 5-4 to hold interest rates at 4 per cent but a continually weakening labour market may be enough to swing one or two rate setters the other way.
Andrew Bailey, the Bank’s governor has warned though that the job on inflation is not yet done, and that certainly won’t be helped by the strong figures on public sector pay, which grew by 6.6 per cent.
Job vacancies are largely flat at 723,000 but are down 12 per cent on a year ago. The biggest slowdowns appear to be in retail and construction – parts of the economy Reeves needs to boost at the Budget if she’s serious about getting Britain growing. To do that, though, she needs to confront the reality that her policies so far – and the fear of what’s to come – have done nothing for the economy but destroy jobs.
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