Commenting on the latest ONS labour market data, Adam Deasy, economist at PwC UK, said:
“The labour market continues to cool. Vacancies have fallen again, marking the 31st consecutive quarterly decline, and the unemployment rate is steady at 4.4%. Movements are slight, but the demand for workers is softening.
“Pay growth remains elevated, with annual growth of regular pay at 5.9%, the fastest level in eight months. While wage growth still appears sticky, more recent survey data suggests employers are tightening their purse strings as the impact of the Government’s tax hikes in the Autumn Budget take hold. This raises the possibility of a slowdown in pay settlements further down the line.
“After a 25bps cut earlier this month, Bank of England Governor Andrew Bailey has reiterated that monetary policy will be loosened ‘gradually and carefully.’ The latest data are unlikely to shift that stance, reinforcing expectations that rate cuts will come—it's just a matter of timing.”
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