Unemployment falls to 4.2 per cent, wage growth slows

This week is significant for British economic data, with inflation figures set to be released on Wednesday, followed by second-quarter growth figures on Thursday.

• EasternEye
• 13 August, 2024

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By: EasternEye

THE UNEMPLOYMENT rate dropped to 4.2 per cent in the second quarter, according to official data released on Tuesday. This is down from 4.4 per cent in the three months to the end of May, the Office for National Statistics (ONS) reported.

Analysts had expected a slight increase in the unemployment rate.

Wage growth, excluding bonuses, also slowed, decreasing to 5.4 per cent from 5.8 per cent during the same period. This marks the lowest wage growth level since August 2022, the ONS noted.

“The number of job vacancies continues to decline, although the total number remains above pre-pandemic levels,” said Liz McKeown, ONS director of economic statistics.

This week is significant for British economic data, with inflation figures set to be released on Wednesday, followed by second-quarter growth figures on Thursday.

These data points could influence future interest-rate decisions by the Bank of England.

“The further easing in wage growth will be welcomed by the Bank of England as a sign that labour market conditions are continuing to cool,” said Ruth Gregory, deputy chief UK economist at Capital Economics.

She added that this supports the forecast that the Bank of England will implement two more 25 basis-point interest rate cuts later this year.

Earlier this month, the Bank of England cut borrowing costs for the first time since early 2020, following a significant drop in UK inflation from four-decade highs.

(With inputs from AFP)