The Monetary Policy Committee (MPC) will be picking over the bones of the wages and vacancies data today, although they will have to wait another week for the official jobs figures to drop as the ONS number crunchers have decided they need more time to garner robust figures.
The slew of labour market statistics are often a mixed bag, throwing out conflicting signals about the direction of travel.
Today’s are a crucial set of numbers, coming as they do little more than a fortnight before the next decision on rates from the Bank of England, and only a month before the Autumn Statement.
Though there are some tentative signs of a cooling, with headline wage increases very slightly down, this is still a very tight labour market by historical standards. Andrew Bailey and his colleagues will certainly not be able to relax while pay is rising at close to 8%. Anecdotally there are still widespread labour shortages through many sectors of the economy. Business owners have certainly not stopped moaning about how hard it is to recruit.
Next week’s delayed jobs figures, when they finally drop, are likely to show that unemployment is still — thankfully — at remarkably low levels. It seems likely that the MPC will choose to stay its hand again next month, perhaps this time with a more convincing majority for a hold following last month’s tight 5-4 split.
The bigger question is how long they stay at current levels, with doveish forecasters predicting next spring and the hawks looking as far ahead as the autumn before the monetary tide turns. In real terms, pay is barely higher than it was in 2006.
Employees will surely continue to press for catch-up pay rises ahead of the current level of inflation while they still hold the whip hand. The post-pandemic wage boom is not over yet.
