UK (Parliament Politics Magazine) – UK labour market weakens with wages slowing to 4.8% and unemployment steady at 4.7%, signalling rising job losses and economic pressure.
As reported by The Guardian, official figures show the UK jobs market is weakening, pay growth is slowing, and redundancies are rising.
What did ONS data reveal about UK pay growth and unemployment?
Office for National Statistics data revealed that UK pay growth slowed to 4.8% in the three months to July, down from 5% in June, in line with City economists’ predictions.
The official unemployment rate stayed at 4.7% in July, the highest in four years, aligning with forecasts. The rate increased from 4.6% in the prior quarter, exceeding last year’s predictions amid slowing hiring and falling vacancies.
The recent figures show a 4.8% rise in average earnings, providing pensioners with hundreds of pounds under the triple lock.
What did Liz McKeown say about UK jobs and wages?
The ONS director of economic statistics, Liz McKeown, stated,
“The labour market continues to cool, with the number of people on payroll falling again, while firms also told us there were fewer jobs in the latest period.”
She added,
“Wage growth excluding bonuses edged down further in cash terms, though it remains strong by historic standards.”
What did economists say about UK payrolls and the jobs market?
The ONS’s data comes from a labour force survey, which has faced criticism over response rates. Economists warn that poor survey responses leave decisions increasingly uncertain.
Experts point to HMRC figures showing payrolls fell by 8,000, highlighting clear signs of a slowing UK jobs market. Early estimates suggest payrolled employees in the UK are down 127,000 from last year.
What did Suren Thiru say about the UK jobs market cooling?
Suren Thiru, the economic director at the Institute of Chartered Accountants in England and Wales, stated,
“These figures suggest that the UK’s jobs market is wilting under the weight of a stagnating economy and skyrocketing staffing costs as more businesses aim to shrink their workforce in response to these twin headwinds.”
He added,
“While the pace at which pay growth is slowing remains painfully pedestrian, its current downward trajectory should gather momentum over the autumn as the eye-watering financial squeeze on businesses takes its toll on pay awards.”
What did Pat McFadden say about the UK labour market progress?
New Work and Pensions Secretary Pat McFadden highlighted small gains in the labour market. He noted that economic inactivity fell 0.02 points to 21.1% last quarter.
Mr McFadden said,
“Today’s figures show signs of progress with economic inactivity and redundancies continuing to fall. But we must futureproof our workforce by giving people the opportunities and skills they need to secure the jobs of tomorrow.”
He stated,
“It is vital that our £240 million Get Britain Working plan is felt by people across the country, whether it’s through targeted support for young people entering the workforce, or joining up work, health and skills support.”
Mr McFadden added,
“The true strength of the UK’s economy lies in the British people, which is why we are unlocking opportunity in every part of the country to drive forward economic growth under our plan for change.”
Daisy Cooper’s views on Labour’s handling of jobs and public services
Daisy Cooper, the Liberal Democrat Treasury spokesperson, accused Labour of “self-sabotage,” saying its policies are pushing more people out of work.
She added,
“[It has put] even more pressure on already stretched public services and leaving businesses scrambling just to keep the lights on.”
What did Ashley Webb say about UK payroll employment?
Capital Economics’ UK economist, Ashley Webb, stated,
“The 8,000 fall in payroll employment in August was the ninth monthly fall in the ten months since the October Budget. But previous revisions mean that instead of having fallen by 165,000 in total since October, payroll employment is now thought to have fallen by 153,000.”
What did Monica George Michail say about UK wage growth and unemployment?
Monica George Michail, NIESR associate economist, forecasts UK wage growth to slow further by year-end.
She said,
“Today’s figures show that unemployment stands at 4.7%, its highest level in four years, and hiring momentum is rapidly slowing, with the number of jobseekers more than double the available vacancies. This suggests that wage growth will likely continue to fall, approaching 4% by year-end, according to our forecast.”
Ms Michail added,
“A moderation in pay growth would keep the door open for further interest rate cuts by the Bank of England, after a prolonged period of elevated wage pressures. On the fiscal front, rising unemployment will likely deter the Chancellor from further raising taxes on businesses in the next budget to avoid weighing on growth.”
How weak growth and inflation pressure BoE policy choices?
Rising wages are pressuring the Bank of England, boosting inflation and putting interest rate cuts at risk this year. A sharper slowdown in the jobs market may signal economic decline, prompting calls for faster interest rate cuts.
The BoE is expected to hold its base rate at 4% at Thursday’s policy meeting. City investors warn high inflation may keep central bank rates on hold until spring 2026, with only a small cut expected by April 2026.
Official data expected to show August UK inflation steady at 3.8%, well above 2% target. Economists warn that slowing jobs, weak growth, and higher taxes may force the BoE to intervene.
Martin Beck, the chief economist at WPI Strategy, added,
“The case for a further cut in interest rates before year-end, a move not currently priced in by markets, is still a real one. That possibility will hinge in part on the scale of fiscal tightening in the budget.”