Markets and economists expect the Bank of England to leave interest rates unchanged as recent UK labour-market data show a drop in unemployment but mixed signals for job demand. Multiple reports say the UK unemployment rate falls to around 4.9%, while wage growth increases by more than expected, supporting the view that inflation risks have not disappeared. At the same time, coverage highlights a continuing softening in the labour market: surveys remain weak, redundancies and the claimant count are described as rising or returning to higher levels, and vacancies are falling. One economist cited in reporting argues the labour market is not yet “out of the woods,” suggesting there is little reason for the BoE to rush into higher rates. Financial outlets also note that private-sector wage growth appears to suffer, pointing to uneven pay momentum across sectors. Overall, the sources portray a gradual weakening in employment conditions alongside improvement in the headline unemployment measure, leading to expectations that the BoE will maintain its current policy stance while monitoring developments.
Bank of England expected to keep rates on hold as UK unemployment falls
Markets and economists expect the Bank of England to leave interest rates unchanged as recent UK labour-market data show a drop in unemployment but mixed signals for job demand. Multiple reports say t...
- UK unemployment rate falls to about 4.9% in the latest data, while wages grow more than expected.
- The Bank of England is widely expected to leave interest rates on hold.
- Sources describe continued labour-market weakening, including falling vacancies and weak survey indicators.
- Redundancy notifications and the claimant count are reported as rising or returning to higher levels.
- Private-sector wage growth is described as weaker, indicating mixed pay pressures across sectors.
Rolling coverage of the latest economic and financial newsIt’s clear that the labour market is not out of the woods yet, argues Sanjay Raja, chief UK economist at Deutsche Bank.And as such, he sees little reason for the Bank of England to rush into raising interest rates.Survey data remain weak. HR1 advanced redundancy notifications have jumped in April and May. The claimant count rate is also back to its highest level since March last year. And still falling vacancies point to more slack in the jobs market.We expect the labour market to remain a bit sluggish through the coming months. But there is some light at the end of the long enduring US/Iran conflict. Should the MoU [memorandum of understanding] hold, we would expect employment trends to pick back up on the margins.“Low levels of employer demand for labour unfortunately reflect a combination of government policies which have increased the cost and risk associated with hiring employees. This is choking off work opportunities for young people in particular, as jobs continue to decline in important youth employment sectors such as accommodation and food and retail.“The cost of doing business has risen sharply in recent years, driving persistent weakness in hiring. Continue reading...
2 months agoBank of England expected to leave interest rates on hold; UK unemployment falls – business live The GuardianPeople starting new jobs at lowest level in five years BBCUK unemployment rate falls to 4.9% and wages grow more than expected The GuardianUK labour market’s gradual weakening justifies extended BoE hold Financial TimesUnemployment rate falls but private sector wage growth suffers Sky News
2 months ago
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