LONDON, Aug 16 (Reuters) – UK employment remains buoyant but began to decelerate in the second quarter, official statistics showed on Tuesday, with companies holding back hiring and pre-inflation wages taking a nose dive.
The unemployment rate certainly remained stable at 3.8% in April-June, not far from its lowest level in half a century, despite fears of recession, again relayed at the beginning of the month by the Bank of England (BoE).
But the number of people with jobs rose by only 160,000 from the previous quarter, a figure well below expectations since economists polled by Reuters had forecast 256,000.
The number of unemployed has meanwhile increased slightly with the return to the job market of thousands of people looking for a job.
The number of vacancies, at 1.274 million, remains close to its all-time high but has fallen for the first time since mid-2020.
“Even if hiring slows, we expect the unemployment rate to remain relatively stable until the end of the year” due to the persistent shortage of labour, commented Jake Finney, economist at PwC. .
The Bank of England estimates that the unemployment rate will only start to rise again in mid-2023, reaching 6.3% within three years.
Statistics released on Tuesday also show a 4.7% increase in wages excluding bonuses in the second quarter compared to the corresponding period last year. But once adjusted for the increase in consumer prices, wages fell by 4.1%, unheard of since monitoring of this indicator began in 2001.
“The scale of the deterioration in wages is even more marked than the official figures suggest because the estimated increase in wages remains artificially boosted by the effects of the partial unemployment compensation mechanism in force last year”, notes Nye Cominetti, senior economist at the Resolution Foundation think tank.
The monthly consumer price figures will be released on Wednesday and the Reuters consensus expects them to be up 9.8% year on year. The BoE expects inflation to reach 13.3% in October, the highest since 1980. (Report William Schomberg and David Milliken, French version Marc Angrand, edited by Kate Entringer)