UK labour market shows early signs of cooling
The UK labor market has shown early signs of cooling off according to the latest official figures with a slight rise in unemployment in recent months, but rising underlying wage growth showed that inflationary pressures are still strong.
The Office for National Statistics figures show that the unemployment rate rose 0.1 percentage point to 3.8 percent in the second quarter of this year, while the employment rate fell by the same amount to 75.5 percent.
That rate was one percentage point below pre-pandemic levels and left 281,000 fewer people in work than before Covid-19 hit.
But the job market was still tight with 1.27 million job openings in the three months to July, a small drop from a record level, available to the 1.29 million people registered as unemployed and wanting to start work immediately.
With the labor market remaining tight, the Bank of England will be concerned that underlying wage growth, excluding bonuses, rose to 4.7 percent yoy in the second quarter. However, amid much higher inflation, real wages fell 3 percent over the same period, the fastest decline since comparable records began in 2001.