UK Pay Growth Tops Expectations

RTTNews | 40 days ago
UK Pay Growth Tops Expectations

(RTTNews) - Average earnings in the U.K. grew better than expected in March and the jobless rate rose slightly, while the fall in employment was less than expected and vacancies continued to decline, giving more evidence of a cooling labor market to Bank of England that is preparing to lower interest rates soon. Wages excluding bonuses grew 6.0 percent year-on-year in the January to March period, preliminary data from the Office for National Statistics showed Tuesday.

Economists had forecast a gain of 5.9 percent in regular pay that serves as the preferred gauge for the Bank of England to measure wage inflation. Pay including bonuses grew 5.7 percent annually in the three months to March. Economists had expected an increase of 5.3 percent. ONS said both the manufacturing and the finance and business services sector logged the biggest annual regular growth rate at 6.8 percent.

Regular pay growth in the private sector was 5.9 percent, which was the biggest gain since the April to June period of 2022, when wages grew 5.4 percent. Public sector pay rose 6.3 percent in the March quarter.

The unemployment rate for those of age 16 and older rose to 4.3 percent in the three months to March, which was in line with expectations.

The claimant count increased by 8,900 on the month to total 1.579 million in April, which was much less than the 13,900 economists had forecast.

Employment decreased by 178,000 persons from the previous period, which was much smaller decrease than the 215,000 slump economists were looking for.

The number of vacancies decreased by 26,000 sequentially in February to April to 898,000 jobs. Vacancy numbers decreased on the quarter for the 22nd consecutive period, the ONS said.

Thirteen of the 18 industry sectors reported a fall in job openings.

"Whether it's falling vacancies or slower private-sector wage growth, there's plenty of evidence that the UK jobs market is cooling," ING economist James Smith said.

The Bank of England is set to shift focus from wage inflation to services inflation in the coming weeks to determine whether it should cut interest rates in June or beyond, the economist said.

"Services CPI will fall back in year-on-year terms, but we think the risk is that this fall will be slightly less dramatic than the BoE expects," Smith said.

"If we're right, then that slightly favors August over June as the start date for rate cuts. But in all honesty, we think it's looking pretty 50-50 right now."

"Today's data chimes with the picture we're hearing from businesses," Jane Gratton, deputy director, public policy at the British Chambers of Commerce said.

The latest BCC survey had showed an easing in recruitment conditions in the first quarter with fewer firms facing difficulties hiring.

"But significant challenges and pressures remain. Competition for skills, increased wage costs and high interest rates continue to ramp up pressure on businesses and act as a drag on investment and growth," Gratton added.

read more
UK Private Sector Grows At Slowest Pace In 7 Months

UK Private Sector Grows At Slowest Pace In 7 Months

The UK private sector growth weakened to a seven-month low in June as the slowdown in the service sector growth offset the stronger performance in manufacturing, flash survey results published by S&P Global revealed on Friday. The flash composite output index dropped unexpectedly to 51.7 in June from 53.0 in May. The score was forecast to rise marginally to 53.1.
RTTNews | 2 days ago
UK Public Debt Highest Since 1960s; Budget Deficit Remains Below Estimate

UK Public Debt Highest Since 1960s; Budget Deficit Remains Below Estimate

The UK public sector net debt rose to its highest level since early 1960s, while public sector borrowing remained below the official estimate, the Office for National Statistics reported Friday. Public sector net debt excluding public sector banks was estimated at 99.8 percent of gross domestic product at the end of May. This was 3.7 percentage points more than at the end of May 2023.
RTTNews | 2 days ago
UK Retail Sales Rebound In May

UK Retail Sales Rebound In May

UK retail sales rebounded in May as sales across all sectors recovered after poor weather damped turnover in April, official data revealed on Friday. The retail sales volume grew 2.9 percent on a monthly basis, offsetting the 1.8 percent fall in April, the Office for National Statistics reported. The growth also exceeded economists' forecast of 1.5 percent.
RTTNews | 2 days ago
Bank Of England Holds Rate At 16-Year High Despite Slowing Inflation

Bank Of England Holds Rate At 16-Year High Despite Slowing Inflation

The Bank of England retained its key policy rate on Thursday at a 16-year high despite inflation easing to the 2 percent target as policymakers are still concerned about services inflation and wage growth. The Monetary Policy Committee, led by Governor Andrew Bailey, decided to hold the bank rate at 5.25 percent again in a split vote. The current bank rate is the highest since early 2008.
RTTNews | 3 days ago
UK Inflation Eases To 2% Target

UK Inflation Eases To 2% Target

UK consumer price inflation hit the 2 percent target in May, data from the Office for National Statistics showed on Wednesday. Consumer price inflation softened to 2.0 percent in May, as expected, from 2.3 percent in April. The central bank targets to keep inflation at 2 percent.
RTTNews | 4 days ago
UK Economy Flatlines As Election Looms

UK Economy Flatlines As Election Looms

The UK economy stagnated in April as services growth was offset by falls in production and construction output, which was largely caused by an unusually wet weather, and dealt a setback to Prime Minister Rishi Sunak ahead of the July 4 general election. Gross domestic product remained flat on month, as expected, after expanding 0.4 percent in March, the Office for National Statistics said Wednesd
RTTNews | 11 days ago
UK Jobless Rate Falls; Wage Growth Remains Strong

UK Jobless Rate Falls; Wage Growth Remains Strong

The UK unemployment rate fell to the lowest since the middle of 2021 but the wage growth remained strong in three months to April, adding weight to the view that the next Bank of England interest rate cut will be in August. The unemployment rate rose to 4.4 percent in the three months to April from 4.3 percent in three months to March, the Office for National Statistics reported.
RTTNews | 12 days ago
UK Job Placements Fall At Slowest Pace In More Than A Year: KPMG/REC Report

UK Job Placements Fall At Slowest Pace In More Than A Year: KPMG/REC Report

UK permanent staff appointments fell for the twentieth consecutive month in May but the pace of decrease was the softest since March 2023, a report compiled by S&P Global showed on Monday. Recruitment consultants cited delayed decision making and a lack of demand amongst companies as reasons for the fall in recruitment activity, the KPMG/REC Report on Jobs revealed.
RTTNews | 13 days ago