UK unemployment remains stable, wage growth sees decline: ONS

“While annual pay growth remains high in cash terms, we continue to see signs that wage pressures might be easing overall,” said Liz McKeown, ONS director of economic statistics

• Kimberly Rodrigues
• 16 January, 2024

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By: Kimberly Rodrigues

Official data released on Tuesday (16) indicated that UK unemployment remained stable, while wage growth retreated in the three months to the end of November. These findings help alleviate concerns about inflation.

The unemployment rate came in at 4.2 per cent, unchanged from the three months to the end of October, the Office for National Statistics (ONS) said in a statement.

Annual average wages excluding bonuses jumped 6.6 per cent in three months to the end of November but this was down on the 7.3-per cent reading in the three months to the end of October, the ONS added.

“While annual pay growth remains high in cash terms, we continue to see signs that wage pressures might be easing overall,” said Liz McKeown, ONS director of economic statistics.

“However, with inflation still falling more quickly, earnings continued to grow in real terms.”

All eyes will now be on official UK inflation data due on Wednesday, which is expected to reveal a further easing in the rate of price increases.

The annual rate currently stands at 3.9 per cent, still far above the Bank of England’s 2.0-per cent target.

“The marked slowdown in pay growth will ease the Bank of England’s concerns of a potential wage-price spiral, which could lead to faster falls in inflation,” noted Yael Selfin, chief economist at KPMG UK.

Markets are waiting to see when major central banks, notably the US Federal Reserve, European Central Bank and BoE, will start to cut interest rates as inflation continues to cool.

McKeown added that while UK job vacancies fell again, mainly owing to cuts in retail positions, “the overall number… remains above its pre-pandemic level.”

Job vacancies dropped by 49,000 in the final quarter of last year to 934,000 — the 18th three-month period in a row that openings had fallen and the longest decline on record.

(AFP)