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The Guardian - UK
The Guardian - UK
Business
Graeme Wearden

Pre-election UK interest rate cut unlikely despite cooling jobs market and rising mortgage arrears; Moody’s warns France over snap election – as it happened

United Kingdom Unemployment United States Office for National Statistics the Office for National Statistics
A job centre in London, Britain.
A job centre in London, Britain. Photograph: Andy Rain/EPA

Closing post

Time for a recap:

Hopes that UK interest rates could be cut before July’s election are fading, after UK real wages grew at their fastest pace since 2021.

The money markets indicate there’s only a 10% chance that the Bank of England lowers borrowing costs next week.

Rate cuts are unlikely after the latest labour market data showed a pick-up in real wages, while nominal earnings rose at the same pace as a month ago.

Pay held up despite the number of people unemployed in the UK rising by 138,000 in the three months to April amid growing signs of a weaker jobs market.

In the last set of labour market figures before the general election, the Office for National Statistics said employment and job vacancies were down and joblessness had increased.

Economists warned that the UK workforce was sicker and poorer than at the start of the parliament, after the number of people off work with long-term sickness hit a new high.

Sir Keir Starmer said he was confident that interest rates would fall under a Labour government.

Elsewhere, anxiety over political instability in France has hit the financial markets again today.

Moody’s warned that the French snap parliamentary elections are negative for the country’s credit rating, adding:

“Potential political instability is a credit risk given the challenging fiscal picture the next government will inherit.”

French bonds have weakened again today, while European stock markets are on track for their biggest one-day drop in two months.

And in other news…

French bank shares are having another poor day, amid the worries over the political outlook for the EU’s second largest economy.

Credit Agricole are down 4%, while Société Générale have lost 4.15% and BHP Paribas is off 3.3%.

Moody’s warning that France’s snap parliamentary elections are a “credit negative” event (see 9.27am) has refocused attention on the prospect of the far-right National Rally party potentially becoming the largest party.

There is an irony in today’s earnings figures – in that, while it’s excellent news that pay is rising faster than inflation, it does dampen the prospects of a cut to borrowing costs…

Over in Brazil, inflation has nudged higher.

Official data released today shows that prices rose by 3.93% in the year to May, up from 3.69% in April.

In May along, prices rose by 0.46%.

This ends a seven-month stretch of falling inflation, and will increase the pressure on Brazil’s central bank to leave interest rates on hold next week, at 10.5%.

Ex-NatWest CEO Dame Alison Rose hired by private equity firm Charterhouse

Alison Rose, who lost her job running NatWest in the debanking row with Nigel Farage last summer, has a new role – senior adviser at private equity firm Charterhouse.

Private Equity News are reporting that Charterhouse, the London based private equity investment firm [not to be confused with chancellor Jeremy Hunt’s private school…] appointed Rose in April.

News of the appointment comes nearly a year after Rose resigned, after admitting she had been the source of a controversial BBC story about Farage’s bank accounts.

PE News says:

Rose was a rare example of a female chief executive of a major bank, having taken the reins of NatWest from Ross McEwan in November 2019. A regular on Private Equity News sister publication Financial News’s 100 Women in Finance, she last made the cut in 2022 as she was ousted from the state-owned bank before the 2023 list was released.

Rose did not get “good leaver” status, the bank confirmed on 10 November, meaning she went without nearly £7.6m in unvested share awards and bonuses for 2023.

Last December, she also had her name removed from a government-backed review into female entrepreneurship.

FTSE 100 on track for worst day since April

Shares have fallen further in London today, putting the blue-chip FTSE 100 share index on track for its worst day in almost two months.

The FTSE 100 is now down 82 points, or 1%, at 8146 points, its lowest since early May.

That would be its biggest one-day drop since 16th April.

European stock markets have also dropped deeper into the red, as invesstos are spooked by the political turmoil in France.

The euro has dropped to its lowest level in around six weeks; it’s down 0.3% at $1.0733, adding to Monday’s losses after Emmanual Macron called a snap election after a significant defeat by the far-right in the EU vote.

The revolving door between Whitehall and British industry is spinning like a wind turbine, with energy company EDF appointing former top civil servant Sir Alex Chisholm KCB as its chairman.

Chisholm only recently stepped down as chief operating officer for the civil service in April, effectively its second-in-command.

He also served as Permanent Secretary to the Business Department from 2016 to 2020, where he worked on the plan to build Hinkley Point C power station – which is running late and over budget, and for which EDF has taken a €12.9bn (£11bn) impairment charge.

Chisholm was also chief executive of the Competition and Markets Authority from 2013 to 2016.

Simone Rossi, EDF’s UK CEO, says appointing Chisholm will help EDF hit its net zero goals:

“EDF will be tackling some of the most significant opportunities and challenges associated with assuring Great Britain’s future needs for a secure, low carbon, more electric economy.

Sir Alex brings great private and public-sector leadership, governance and regulatory experience that can help steer the company’s efforts to help Britain achieve net zero.”

Updated

Newsflash: The Opec cartel has trimmed its estimate for oil demand growth in the first quarter of this year, but is maintaining its forecast for 2024 as a whole.

In its latest monthly report, Opec forecast that world oil demand will rise by 2.25m barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025, the same as a month ago.

OPEC lowered its estimate of total demand in the first quarter of this year by 50,000 bpd to 103.51 million bpd, but increased its forecast for the second quarter by 50,000 bpd, meaning no change in the overall forecast.

Opec said the stability in the services sector would support demand for energy, explaining:

“It is projected to be the main contributor to the economic growth dynamic in the second half of 2024, particularly. supported by travel and tourism, with a consequent positive impact on oil demand.”

Strikes by British workers fell to the lowest in more than two years ahead of the general election on 4 July, Bloomberg reports.

They say:

The number of days lost to strikes dropped to 17,000 in April, the lowest since February 2022 and down sharply from the levels seen at the peak of industrial strife after inflation hit double digits.

The respite may be short-lived, with junior doctors planning industrial action and unions warning of more walkouts regardless of who wins the election.

Economist Simon French of Panmure Gordon points out that UK mortgage arrears are still well below the levels seen before the 2008 financial crisis, despite rising to an eight year high today (see 10.25am):

Starmer confident interest rates will fall under Labour

Interest rates would come down under a Labour government, Sir Keir Starmer has said, after economists criticised Rishi Sunak for making a similar claim, PA Media reports.

Asked whether he was confident interest rates would fall if Labour came to power, Sir Keir told reporters he was, as his party would “stabilise the economy”.

He added:

“That’s why we’ve set out our six steps which are the things that we will do on July 5, on the first day if we get the opportunity, and the first thing is to stabilise the economy, for the very reason I said.

“If you lose control of the economy it’s working people who pay the price and I’m not prepared to let that happen.”

The money markets are predicting rate cuts in 2025, as well as one this year. UK interest rates are forecast to drop to around 4.25% by the end of next year, which implies four quarter-point rate cuts over the next 18 months.

Updated

Raspberry Pi shares soar on stock market debut

UK tech firm Raspberry Pi has made a sparkling stock market debut.

Cambridge-based Raspberry Pi, which sells low-cost computers aimed at helping children to learn about computing, has floated in London at a market capitalisation of £541.6m, or 280p per share.

And traders are piling into the company, pushing up its share price by a third to 370p.

Dan Coatsworth, investment analyst at AJ Bell, says the float proves the UK can attract tech flotations:

“Investors of all shapes and sizes have feasted on a slice of Raspberry Pi in what is the most significant IPO for the London market for a long time. It may only fall into smaller company territory, but this IPO is big from a strategic perspective.

“It shows the UK is open for business to technology flotations and that investors are hungry for companies of any size if they tick the right boxes. There is a widely held view that tech companies only float in the US where they can potentially get a higher valuation. Raspberry Pi is proof that the UK can still compete against the likes of the Nasdaq and attract home-grown champions.

“Raspberry Pi is a profitable, established name and not reliant on the ‘jam tomorrow’ story that often props up a lot of tech IPOs. It has a large community of users; it makes money rather than simply being a bright idea that is not yet commercialised; and there is a strong social angle as Raspberry Pi has education built into its business model.

“The UK market is woefully under-represented in tech names and hopefully Raspberry Pi’s IPO success will open the flood gates for others in the sector to also float here. If the London Stock Exchange wants a new posterchild for how IPOs should play out and to attract others onto the market, Raspberry Pi is the one to hold up high.”

The pound has hit a new 22-month high against the euro.

Sterling has climbed above €1.185 against the single currency today, boosting the spending power of Brits heading to the continent this summer.

That’s a gain of 0.25% today, to the highest level since August 2022.

Updated

Key event

European stock markets are in the red again.

The UK’s FTSE 100 has dropped to its lowest level since the end of last month, down 55 points or -0.7% at 8174 points.

Miners and banks are leading the fallers, with Antofagasta down 3%, Standard Chartered losing 2.9% and Glencore off 2.8%.

European markets are also weaker again, with France’s CAC40 dropping another 0.55% and Germany’s DAX losing 0.4%.

Traders are nursing fears that the US central bank may not cut interest rates as soon as hoped.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, explains:

The Federal Reserve (Fed) starts its two-day meeting today and is widely expected to trim its rate cutting projections for this year due to sticky inflation and still-tight jobs market.

The US dollar index spiked past its 50-DMA following last Friday’s surprisingly strong jobs data, and is consolidating gains above this level ahead of tomorrow’s most important CPI data and the Fed announcement.

Provided the economic data and the inflation trends, there is a greater chance that we hear a hawkish Fed statement than the contrary.

The gap between Paris and Berlin’s borrowing costs are widening again….

That suggests bond investors are seeing French bonds as riskier, given the uncertainty created by the snap elections announced on Sunday.

Updated

UK mortgages in arrears rise as households come under pressure

Worryingly, the number of UK mortgages in arrears has risen to a seven-year high.

New Bank of England data shows that 1.28% of loans were in arrears in the first quarter of 2024, up from 1.23% in the previous three months.

That’s the highest reading since the fourth quarter of 2016, and suggests more households are strugging to meet their mortgage payments due to high interest rates.

The value of outstanding mortgage balances with arrears increased by 4.2% from the previous quarter to £21.3bn – a 44.5% increase compared with a year earlier. This is the highest reading in almost a decade, since the third quarter of 2014.

Simon Gammon, managing partner at Knight Frank Finance, said:

“The value of mortgage balances in arrears has surged as household finances have come under pressure from both higher mortgage rates and the rising cost of various goods and services.

This is serious for people struggling to pay their mortgage, but it doesn’t yet present a systemic risk to the housing market. The proportion of the total loan balances in arrears is still relatively low at 1.28%, though Bank of England policymakers will be watching this data closely. New arrears cases actually dipped a little during the quarter, which suggests the situation may be stabilising.

“Mortgage rates are currently trading sideways and barring any nasty surprises, should continue easing once the timing of the Bank of England’s first cut to the base rate becomes clearer.

“Anybody concerned about falling behind on their mortgage payments should contact their lender as early as possible. The lenders have received strict instructions from regulators to offer forbearance, whether via extending mortgage terms or temporarily switching to interest only payments.”

Updated

ING developed markets economist, James Smith, suspects the financial markets are underpricing the chances of a UK interest rate cut this summer:

Smith explains:

“The UK jobs market is cooling quite noticeably now, and that makes it all the more surprising that financial markets are pricing just a 7% probability of a rate cut next week and only 46% for August’s meeting.

We think a summer rate cut is much more likely.

Today’s hiring figures back this up, Smith argues, although he points out there are still “major question marks” surrounding the quality of the data.

Taken at face value, the rise in the unemployment rate from 3.8% at the end of last year to 4.4% now is pretty eye-catching. But the very pronounced fall in the response rate to the Labour Force Survey and potential bias in the achieved sample means it is still hard to know how seriously to take these latest numbers.

But the data on unemployment corresponds with the ongoing fall in job openings, and the vacancy-to-unemployment rate is now back down to pre-Covid levels. An alternative measure of employment using firms’ payroll data shows it flat to slightly negative so far this year.

Although real wages are growing a faster rate this year (as inflation falls), they’re still below their levels before the cost of living crisis, points out Hannah Slaughter, senior economist at the Resolution Foundation:

Updated

French bonds weaken after 'crazy' dissolution

French government bonds are weakening again this morning, adding to losses yesterday.

With prices falling, the yield (or interest rate) on 10-year French government bonds has risen to 3.28%, up four basis points (or 0.04 percentage points) from last night.

That’s the highest levels since last November.

These 10-year bond yields, a measure of French government borrowing costs, ended last week at 3.12%, but jumped on Monday, before rising again today.

Rising bond yields reflect investor nervousness about the political uncertainty in France created by Emmanual Macron’s decision to dissolve the French parliament and hold snap elections.

Christophe Jakubyszyn of French financial newspaper Les Echos has argued that Macron acted too quickly, with a “crazy” dissolution which risks leaving the door wide open to the far right.

Updated

Moody's issues France with credit rating warning over snap elections

Across the Channel, ratings agency Moody’s has warned the French government that its snap parliamentary elections are negative for the country’s credit score.

In a statement, Moody’s warns:

“This snap election increases risks to fiscal consolidation.”

President Emmanual Macron shocked Europe by announcing the parliamentary election, just a few hours after learning that his centrist allies had been pummelled in European elections, while the far right Rally National had secured twice as many votes, around 32%.

Moody’s suggests that its current “stable” outlook on France’s rating could be cut to “negative” if its debt metrics worsened further, saying:

“Potential political instability is a credit risk given the challenging fiscal picture the next government will inherit.

A weakening commitment to fiscal consolidation would also increase downward credit pressures”.

An opinion poll last night suggested that National Rally was on track to win the snap election in France but fall short of an absolute majority.

If RN were to win a majority, Macron will be forced to name a RN deputy as prime minister — leading to a period of so-called “cohabitation” between the parliament and the Élysée Palace.

Modupe Adegbembo and Mohit Kumar of Jefferies say:

Such an outcome would leave Macron in an even weaker position to push through much need economic reforms including changes to unemployment benefits and fiscal consolidation. Even in a situation in which Macron is able to still command a majority, it hard to think he will not end up in an even weaker position after this.

Updated

Bank of England unlikely to cut interest rates in short term despite cooling jobs market

The Bank of England is unlikely to cut interest rates before next month’s general election, the money markets indicate today.

There’s just a 10% chance that the BoE lowers base rate to 5%, from 5.25%, at its meeting a week on Thursday. (20 June), according to the latest City pricing.

That’s little changed from last night, before this morning’s data showed the labour market is cooling, with unemployment rising again to 4.4%.

The Bank is then due to set rates in August, September, November and December.

And this morning, the markets now expect the first rate cut to come by November. Before 7am today, the first cut was only fully priced in for December.

The complication for the Bank is that it wants to see more evidence that inflationary pressures are cooling. A weaker jobs market will help with that, but wage stickiness – earnings are rising at around 6% per year - will not.

So, the fact that wage growth slowed in April alone – despite being unchanged over the February-April quarter – could nudge some policymakers towards considering easing policy this year, if the trend continues.

Yael Selfin, KPMG’s chief economist, says today’s “mixed labour market data” is unlikely to shift the dial for the BoE this month:

The unemployment rate ticked up to 4.4%. The recent weakening in demand for staff has been attributed to a lack of roles and firms delaying hiring decisions. This is consistent with a broader trend of retaining existing labour, and could signal that firms expect a pickup in activity so that they could utilise their existing staff more.

“Overall, today’s data are unlikely to warrant an immediate shift in policy from the Bank of England. We expect the MPC to stay put at its June meeting and reassess the incoming data flow over the summer before it embarks on cutting interest rates.”

Matthew Ryan, head of market strategy at global financial services firm Ebury, agrees that hopes of a pre-election interest rate cut have faded:

“Sterling largely held its own off the back of the data, as while rapidly rising wages could delay the start to Bank of England interest rate cuts, the increase in joblessness bodes ill for the UK’s growth outlook.

“This will not be particularly welcome news for Rishi Sunak’s Tory Party, who appear to have based their call for early elections on the strength of Britain’s recent economic data.”

RSM UK economist Thomas Pugh argues that the Bank’s monetary policy committee (MPC) should cut rates in August:

“Today’s data will make pretty uncomfortable reading for the MPC.

But it is clear the labour market is loosening and forward-looking indicators suggest pay growth will slow, combined with a further fall in inflation in May, that should be enough to justify the Bank of England following the ECB with a rate cut in August.

Richard Carter, head of fixed interest research at Quilter Cheviot, says the Bank will be nervous about sparking another bout of inflation, by cutting rates too early:

“The BoE will be incredibly cautious to cut rates at a period when spending power is high for consumers and potentially triggering a fresh inflationary bout.

As such, today’s data will continue to put a dampener on a rate cut in June or August, with November remaining the likeliest date to see that first fall.

Updated

Full story: UK unemployment rises by 138,000 as labour market weakens

There are signs in today’s UK labour market report that wage growth has slowed, despite looking sticky.

Our economics editor Larry Elliott explains:

Annual growth in average earnings in the three months to April was 5.9% for all workers – unchanged on the three months to March – while for the private sector the growth rate eased from 6.1% to 5.8%.

In April alone, earnings overall were 5.5% up on the same month in 2023 compared with 6.4% in the year to March. For the private sector, the annual increase was 5% in April, down from 6.8% in the year to March.

Pay in real terms is rising because wages are rising faster than the annual inflation rate, which stood at 2.3% in April.

Here’s the full story:

Resolution: Cooling labour market means next government must tackle falling employment

The next government will have to tackle the problem of falling employment, rather than falling inflation, says the Resolution Foundation thinktank.

Resolution point out that the UK unemployment rate has increased for four months in a row – from 3.8% in the last quarter of 2023, to 4.4% in the three months to April 2024 – an increase of 190,000 people out of work.

Vacancies have fallen for 23 out of the past 24 months, they add, while the number of employees in the PAYE data has fallen for three out of the past four months, after rising for 35 months in a row.

And average earnings remain more than £14,000 a year off their pre-financial crisis path after 16 years of wage stagnation.

Nye Cominetti, principal economist at the Resolution Foundation, explains:

“The labour market has continued to cool in early 2024, with both unemployment and inactivity up. Worryingly, the UK employment is closer to its mid-pandemic lows, than its pre-pandemic highs.

“Turning around this poor performance, and kickstarting the kind of jobs growth Britain experienced in the 2010s will be a key task for the next government.

“But while the jobs market weakens, pay packets remain resilient. This recent spurt of real wage growth, the strongest in an almost a decade, will be a relief to workers and a worry for the Bank of England. But it can’t be sustained unless productivity picks up.”

Next government must 'widen employment support to all'

The fall in UK employment in the last quarter, and the rise in inactivity, shows that the labour market isn’t working for millions of people, explains Stephen Evans, chief executive of the Learning and Work Institute.

Evans explains:

“The last labour market stats before the election show a further drop in employment and rise in economic inactivity. 3.2 million people are out of work but want a job: the next government needs to widen employment support to all who want to work, given today only 1 in 10 out-of-work disabled people get help to find work each year.

Average earnings are rising in real terms as inflation falls, but are a staggering £12,000 per year below what they’d be on pre-financial crisis trends. This shows the scale of catch-up needed in the years ahead.”

Updated

TUC: The Conservatives have failed working people

TUC General Secretary Paul Nowak says:

“These damning figures show the Conservatives have taken the jobs market from bad to worse.

“Unemployment is rising. Vacancies are falling. Insecure work is at epidemic levels. Record numbers are long-term sick. And wages are still worth less than in 2008.

“The Tories have failed working people. We need a government that will rebuild industry, create wage growth, and deliver a better living for working families.”

UK workforce is 'poorer and sicker' than in 2019

Today’s labour market data shows there will be no time for complacency for the next Government as the UK has a smaller workforce that is poorer and sicker than in 2019.

That’s the verdict of Rebecca Florisson, principal analyst at the Work Foundation at Lancaster University.

Florisson explains that living standards have not recovered despite strong wage growth:

“Annual nominal wage growth was 6%, with the record National Living Wage increase of 9.8% improving the pay of 3.3 million low paid workers. There are signs that the wage growth recovery has peaked.

“Despite real wages rising by 2.3% on the year, the economic impact of the Covid-19 pandemic and the war in the Ukraine has made this the first Parliament since 1955 where living standards have declined. The reality is that most people are feeling poorer than when they last voted in the last General Election nearly five years ago.

The UK also has a smaller workforce than at the start of the Parliament, Florisson adds:

“There are now a record 2.83 million people who are economically inactive due to long-term sickness – 702,000 higher than in January-March 2020. The UK continues to be an international outlier with participation rates well below pre-Covid levels and this trend shows no sign of abating.

Updated

Pay is rising fastest in the City, and slowest on UK building sites.

The ONS explains:

In February to April 2024, the finance and business services sector saw the largest annual total pay growth at 6.9%. The construction sector saw the smallest annual total pay growth across sectors, at 2.1%.

Liz Kendall: Rising unemployment due to Tory 'abject failure'

The rise in unemployment, and in people neither working nor looking for work (economically inactive) is a sign of 14 years of “abject failure” by the government, says Liz Kendall, Labour’s shadow work and pensions secretary:

“Today’s figures confirm that the Tories have no hiding place after 14 years of abject failure.

On Rishi Sunak’s watch, a record number of people are out of work due to long-term sickness at terrible cost to them, to business and the taxpayer, and we remain the only G7 country whose employment rate still isn’t back to pre-pandemic levels.

Labour’s plan will get Britain working by cutting NHS waiting lists, introducing a new national jobs and careers service, making work pay and supporting people into good jobs across every part of the country.

It’s time to stop the chaos, turn the page and start rebuilding Britain.”

Minimum wage increases pushed up warnings.

The increase in the UK minimum wage helped to keep wage growth strong in the last quarter.

The national living wage rose by almost 10% at the start of April, to £11.44 an hour, lifting take-home pay for around three million workers.

Yael Selfin, chief economist at KPMG UK, says:

“Wage growth remained elevated in April as the 10% hike in the National Living Wage was enough to temporarily arrest the downward momentum in pay.

Based on today’s release, we estimate that the rise in the National Living Wage boosted the overall level of pay by around 0.1%, although the current headline rate somewhat underestimates the impact because it is reported as a three-month average.

“The unemployment rate ticked up to 4.4%. The recent weakening in demand for staff has been attributed to a lack of roles and firms delaying hiring decisions. This is consistent with a broader trend of retaining existing labour, and could signal that firms expect a pickup in activity so that they could utilise their existing staff more.

Thomas Pugh, economist at audit, tax and consulting firm RSM UK, agrees that the minimum wage increase kept regular pay high:

“The punchy 0.6% m/m increase in private sector regular pay in April was enough to keep headline total pay growth at 5.9%. However, we estimate at least half of this monthly increase was due to the one-off 9.7% increase in the national minimum wage.

Indeed, the labour market continues to loosen with employment dropping by another 139,000 in the three months to April and the unemployment rate rising to 4.4%

Updated

Wages are rising slightly faster in the UK public sector than in the private sector, today’s labour market report shows.

The Office for National Statistics reports that annual average regular earnings growth for the public sector “remains strong”, at 6.4% in February to April 2024.

For the private sector, total regular (ex-bonuses) pay rose by 5.8%, the slowest rate since April to June 2022 (when it was 5.4%).

Annual average total earnings growth for the public sector was 6.3% and was 5.8% for the private sector, the ONS adds.

UK real wages rising at fastest since 2021

The good news for workers is that real wages (ie, after inflation) rose at their fastest rate in almost three years.

Adjusted for CPI inflation, total pay (including bonuses) grew by 2.7% per year in February to April 2024, which is the fastest rate since July to September 2021 (when it was 3.0%).

Regular pay (which excludes bonuses) rose by 2.9%, the fastest growth since June to August 2021 (when it was 3.4%).

Updated

Introduction: Unemployment rate rises to 4.4%

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Back when the UK general election was called, today was identified as a key date to take the health of the economy.

That’s because the latest labour market data is being released, the first of five pieces of important economic news which will test Rishi Sunak’s claim that his economic plan was working.

The data will also be watched at the Bank of England, as well as across Westminster, as central bankers look for evidence that inflationary pressures are esing.

And the big news is that unemployment has risen, while wage growth remains stickily high – which may dampen hopes of an early interest rate cut.

The Office for National Statistics has reported that the number of people unemployed rose by 138,000 in the February-April quarter, taking the total to just over 1.5 million.

This lifts the UK unemployment rate to 4.4%, the highest since July-September 2021.

The number of people in work has fallen, by 139,000, to 32.97 million.

And 132,000 more people fell out of the labour market altogether, partly due to ill health, taking the total of economically inactive up to 9.434m. That left the economic inactivity rate at 22.3% for the three months to April, up from 22% in the previous quarter.

The data also shows that companies are cutting back on hiring, with the number of vacancies in March to May 2024 falling by 12,000 to 904,000.

The ONS says:

This month’s figures continue to show signs that the labour market may be cooling, with the number of vacancies still falling and unemployment rising, though earnings growth remains relatively strong.

But wage growth did not slow, despite this cooling demand for workers.

The ONS reports that annual growth in regular earnings (excluding bonuses) was 6.0%, the same as for the previous three-month period; and annual growth in employees’ average total earnings (including bonuses) was 5.9%, the same as for the previous three-month period.

The agenda

  • 7am BST: UK labour market statistics

  • 11am BST: NFIB index of US small business optimism

  • Noon BST: Fireside chat with ECB chief economist Philip Lane at the Banking and Payments Federation Ireland National Conference in Dublin

  • 2pm BST: Russia trade balance for April

Updated

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