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UK jobs data sends mixed signals to Bank of England

Published 10/09/2024, 07:55
Updated 10/09/2024, 08:10
© Reuters.  UK jobs data sends mixed signals to Bank of England

Proactive Investors - Employment in the UK increased by 265,000 in July marking the largest rise in employment in over 18 months and clobbering forecasts of 115,000 new jobs.

The increase was largely driven by growth in full-time employment, with more people also taking on second jobs, which now account for 3.9% of all employed individuals, according to the Office of National Statistics.

Unemployment fell to 4.1% in the July quarter, down slightly from 4.2% in the previous quarter, matching expectations.

The strong numbers are likely to spark a conversation around the rate of interest rate cuts from the Bank of England.

Policymakers lowered the bank rate by 25 basis points in August, bringing the benchmark rate down from a 16-year high.

But strong employment figures suggest a resilient economy and raises inflation concerns, which may cause jitters among the more hawkish monetary policy committee members.

On the other hand, Dovish MPC members might highlight that wage growth eased both for the private sector (4.9% year on year in July versus 5.3% in June) and the public sector (5.7% in July versus 6% in June).

The construction sector saw the smallest annual regular growth rate at 3.9%.

The next BoE decision is due on 19 September.

Read more on Proactive Investors UK

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