UK Labour Market Shows Resilience

The United Kingdom’s labour market showed signs of recovery in August, strengthening the case for a possible Bank of England (BoE) interest rate hike next month. The unemployment rate declined to 4.7% from 4.9% in July, while employment increased by 102,000 jobs, well above market expectations.

Labour market

According to MBSB, the labour market data suggest underlying resilience despite signs of cooling elsewhere in the economy. Regular pay growth accelerated to 3.7% year-on-year, although headline earnings growth eased slightly.

While falling job vacancies indicate some moderation in labour demand, MBSB believes the overall data remain mildly hawkish for the BoE, with wage pressures continuing to pose risks to the inflation outlook.

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