Emmanuel OchayiThe latest official figures released by the Office for National Statistics have unveiled a concerning trend in the UK’s job market, indicating a slowdown in wage growth and a decline in job vacancies.
According to the report, pay growth, excluding bonuses, has softened to 7.3% in the three months to October, marking a notable deceleration. Alongside this, there has been a notable drop in the number of vacancies, creating a potential cause for concern regarding the job market’s health.
Join our WhatsApp Channel“This is now the longest period of decline on record, longer than in the immediate aftermath of the 2008 downturn,” remarked Darren Morgan, the director of economic statistics at the Office for National Statistics.
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Despite the deceleration in wage growth, earnings continue to outpace inflation, which measures the rate at which prices are increasing. This detail suggests a potential hesitancy from the Bank of England to consider interest rate cuts shortly.
However, the declining trend in job vacancies, with a reduction of 45,000 between September and November, raises alarms. Yet, the total number of vacancies remains higher than pre-pandemic levels, standing at 949,000.
The situation has sparked discussions among financial markets and economists regarding the possibility of the Bank of England initiating interest rate cuts from the current 5.25% level.
Inflation has eased slightly to 4.6%, according to BBC, but it remains well above the Bank’s 2% target. Despite this, regular pay has managed to outpace inflation in the three months leading up to October.
Yael Selfin, chief economist at KPMG UK, commented, “While momentum has weakened, the labor market remains tight. The Bank of England will stay vigilant as continued tightness could potentially cause setbacks in its battle against inflation, particularly if strong wage growth contributes to persistence in domestic inflation.”
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
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