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UK unemployment ticks higher and pay growth eases

Softer signs from the jobs market will come as good news for the Bank of England

12 March 2024

Unemployment in the UK rose marginally in the three months to the end of January, to 3.9% from the previous reading of 3.8%, according to the Office for National Statistics. Additionally, average earnings (including bonuses) shifted lower to 5.6% over the last quarterly assessment, marginally softer than the 5.7% forecast, compared to 5.8% at the previous assessment.

One would conclude that the jobs market has begun the process of cooling, and this will be welcome news to the Bank of England (BoE) that their inflation battle is playing out as hoped. However, policy rates will not be plummeting any time soon though as the BoE will need to see a few more months of softer inflation readings. But the tea leaves are certainly starting to point to that for the remainder of this year.

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Charles Hepworth

Investment Director
My Insights

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