The unemployment rate jumped while wage growth hit a fresh high, providing a further headache for the Bank of England.
Figures from the Office for National Statistics (ONS) showed that between April to June 2023, annual growth in regular pay (excluding bonuses) was 7.8%; the highest regular annual growth rate since comparable records began in 2001.
Annual growth in employees’ average total pay (including bonuses) was 8.2% in April to June 2023.
But in signs that the BoE’s rate rising spree is having some impact, the unemployment rate for April to June jumped to 4.2% from 3.9% while the number of vacancies between May and July fell by 66,000 on the quarter to 1,020,000.
Headline indicators for the UK labour market for April to June 2023 show:
▪️ employment was 75.7%
▪️ unemployment was 4.2%
▪️ economic inactivity was 20.9%
— Office for National Statistics (ONS) (@ONS) August 15, 2023
Vacancies fell on the quarter for the 13th consecutive period.
The number of people in work fell to 75.7%, down 0.1 percentage points on the previous quarter.
Ruth Gregory at Capital Economics commented: "The fall in employment in the three months to June and further rise in the unemployment rate will be welcomed by the Bank of England as a sign labour market conditions are cooling."
"But with wage growth still accelerating, this supports our view that the Bank of England will deliver one more 25 basis point rate hike before it brings its tightening cycle to a close."