Unemployment in the United Kingdom has reached a four-year summit in view of the strong increase in taxes on April's pay and minimum wages as wage growth has cooled, highlighting the assembly strains on the labor market.
Employers have reduced the number of members of the payroll staff by 55,000 between March and April, the National Statistics Office said on Tuesday, which left 0.4% below that of April 2024.
In another sign of the slowdown Job marketThe number of vacancies has dropped and the number of people saying that the benefits are not unemployed have increased. The provisional figures in May, although likely to be revised upwards, showed a drop in pay of 115,000.
Companies are struggling with national higher insurance contributions introduced into the October budget for Chancellors Rachel Reeves and the increase in minium wages. The two measures entered into force in April.
“The cooling of the British job market collects a rhythm,” noted Ing analysts. “Salaries growth also slows down.”
The annual growth of average weekly wages, excluding bonuses, slowed down to 5.2% during the period, according to the ONS. This was lower than analysts' expectations of 5.3% and down 5.5% in three months to March. The growth in total profit, including bonuses, was 5.3%.
After the publication of data, traders increased bets that the Bank of England It would now be reduced the interest rates of a quarter at its September meeting, compared to a previous wait in November.
The book dropped by 0.6% to $ 1.346 while the golden yield at two years, which is sensitive to the expectations of interest rates, dropped from 0.06 percentage points to 3.95%.
The BOE monetary policy committee divided three ways last month when it drops interest rates from a quarter of a point to 4.25%, two officials voting for a larger reduction and two choosing to maintain unchanged prices.
Economists said Tuesday data would reassure political decision-makers that the underlying inflationary pressures in the economy are busy, despite a high collection of inflation in April.
“The job market does not collapse … But most indicators show that the demand for labor is clearly weakening,” said Ruth Gregory, at Consultancy Capital Economics.
The figures would not necessarily arouse a rate drop at the next MPC meeting, but they have supported the case to reduce rates as low as 3.5% over the next year, she added.
Rob Wood, during the macroeconomics of the Pantheon consulting council, said that the labor market “was looking in the worst form in May”, but warned that the pay numbers could overestimate the extent of the weakness, as they do not include any number of independent work.
