Financial News: UK Labor Market Cools In July

UK Labor Market Cools In July

09/10/2024 - 04:47:00 (RTTNews)

(RTTNews) - The UK unemployment rate dropped in the three months to July and the wage growth softened to a two-year low, signalling that the labor market conditions continued to cool, official data revealed Wednesday.

The unemployment rate fell to 4.1 percent in the three months to July from 4.2 percent in the preceding period, data published by the Office for National Statistics showed. The rate came in line with expectations.

Annual growth in average earnings, excluding bonuses, was 5.1 percent in the three months to July, as expected, but weaker than the 5.4 percent posted in the prior period. This was the weakest since 2022.

Earnings including bonuses climbed 4.0 percent from a year ago, following a 4.6 percent rise in three months to June. This was also slower than the forecast of 4.1 percent. Capital Economics' economist Ashley Webb said the further easing in wage growth will be welcomed by the Bank of England as a sign that labor market conditions are continuing to cool.

However, this will not be enough to prompt a back-to-back 25 basis points interest rate cut, from 5.00 percent to 4.75 percent in September, the economist added.

Further, data showed that vacancies decreased on the quarter for the 26th consecutive period. The number of vacancies decreased 42,000 sequentially to 857,000 in the June to August period.

Payrolled employees decreased 59,000 on month in August but increased 122,000 from the previous year to 30.3 million, data showed.

Nearly 42,000 working days were lost because of labor disputes in July. Most of the strikes were in the health and social work sector.

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