In the three months to the end of December:
- The employment rate came in at 75.8%, versus 75.7% in the three months to November
- Unemployment came in at 4.2%, unchanged versus the three months to November and in line with market expectations (Trading Economics)
- Economic Inactivity fell slightly to 20.8%, versus 20.9% in the three months to November
- Annual wage growth came in at 6.6% in the three months to the end of November, versus 7.3% in the three months to October and slightly below market expectations of 6.8% (Trading Economics)
Nicholas Hyett, Investment Manager at Wealth Club, commented;
“While there remains uncertainty about the quality of UK labour data, it looks like the Labour market continues a long slow easing which has seen 18 consecutive quarters of falling job vacancies - the longest run on record. We suspect the cost of living crisis is playing part, pushing those who previously fell into the "economically inactive" bracket back into work.
However, wage growth remains above inflation. That's good news for workers, but together with rising employment may put the Bank of England off cutting interest rates any time soon. If the economy can function with interest rates at their current level, why cut? That would bode ill for investors - who have bet big on rates falling this year - and could see share and bond prices fall if rate cuts don't come through as expected.”
