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Jobless rate rises to 4.3% while wage growth excluding bonuses is at a two-year lowThe job market figures come after the government set out tax increases in the budget, including a rise in employer national insurance contributions (NICs) which business leaders say could hit hiring and pay increases.Paul Daley at Capital Economics added:Even though the rise in pay growth in September will probably be followed by a bigger gain in October, as the new public sector pay deals start, the easing in private sector regular pay suggests that the Bank of England will continue to cut interest rates gradually. We continue to think the Bank will skip the December meeting and cut rates at the following February meeting.Public sector pay will probably jump again in October as the 5-6% pay deals agreed in recent months start to take effect… Most important for the Bank, was that private sector earnings excluding bonuses was stable at 4.8% in September. That left it exactly in line with the rate the Bank forecast last week.The labour market continues to loosen, with vacancies dropping further, though still slightly above pre-pandemic levels. The unemployment rate also ticked up slightly to 4.3%.But wage growth is proving to be a little more persistent. Annual growth in employee’s total earnings is up to 4.3%, reflecting the civil service one-off payments made in the summer. Despite a loosening labour market, nominal pay growth remains in excess of the circa 3% level that is considered to be consistent with the Bank’s 2% inflation target. Real pay continues to grow given that inflationary pressures have fallen back at a faster pace than wage growth.Growth in pay excluding bonuses eased again this month to its lowest rate in over two years. Pay growth including bonuses increased, but for recent periods these figures have been affected by last year’s one-off payments made to public sector workers.Job vacancies have fallen again, as they have been doing for more than two years now. However, the total still remains a little above where it was before the pandemic. Continue reading…
Jobless rate rises to 4.3% while wage growth excluding bonuses is at a two-year low
The job market figures come after the government set out tax increases in the budget, including a rise in employer national insurance contributions (NICs) which business leaders say could hit hiring and pay increases.
Paul Daley at Capital Economics added:
Even though the rise in pay growth in September will probably be followed by a bigger gain in October, as the new public sector pay deals start, the easing in private sector regular pay suggests that the Bank of England will continue to cut interest rates gradually. We continue to think the Bank will skip the December meeting and cut rates at the following February meeting.
Public sector pay will probably jump again in October as the 5-6% pay deals agreed in recent months start to take effect… Most important for the Bank, was that private sector earnings excluding bonuses was stable at 4.8% in September. That left it exactly in line with the rate the Bank forecast last week.
The labour market continues to loosen, with vacancies dropping further, though still slightly above pre-pandemic levels. The unemployment rate also ticked up slightly to 4.3%.
But wage growth is proving to be a little more persistent. Annual growth in employee’s total earnings is up to 4.3%, reflecting the civil service one-off payments made in the summer. Despite a loosening labour market, nominal pay growth remains in excess of the circa 3% level that is considered to be consistent with the Bank’s 2% inflation target. Real pay continues to grow given that inflationary pressures have fallen back at a faster pace than wage growth.
Growth in pay excluding bonuses eased again this month to its lowest rate in over two years. Pay growth including bonuses increased, but for recent periods these figures have been affected by last year’s one-off payments made to public sector workers.
Job vacancies have fallen again, as they have been doing for more than two years now. However, the total still remains a little above where it was before the pandemic.
