UK Hiring Falls But Wage Growth Stays High

• Britain's jobs market has weakened again, official data showed, with payrolls falling for a sixth month and vacancies dropping further, wage growth stayed strong, underscoring why the Bank of England is so cautious about cutting interest rates.
• With the central bank's policymakers split over the risks of a hiring slump and a pickup in inflation pressures, the Office for National Statistics' figures pointed to a continued cooling of the labour market, albeit less sharply than in recent months.
• The number of employees on company payrolls, as measured by tax office data, fell by a provisional 8,000 in July from June, extending a run of declines that began in February but was the smallest decline in that run. The reduction in June was revised down to 26,000, fewer than the originally reported fall of 41,000.
• Employers have said Finance Minister Rachel Reeves' decision to raise a tax on them is weighing on their staffing and pay decisions, as well as causing an increase in their prices. Basic wage growth in the private sector - watched closely by the BoE - edged down to 4.8% in the three months to June. But overall average weekly earnings, excluding bonuses, grew by 5.0%, unchanged from the three months to May and above the 3% level seen as consistent with the BoE's 2% inflation target.
• "Today's labour market figures underline the stagflation quandary facing the Monetary Policy Committee," Jack Kennedy, senior economist at job website Indeed, said. "While a further rate cut in November remains on the cards, it's not a done deal with wage growth remaining elevated amid concerns over inflation persistence."
• The BoE last week cut interest ratesto 4% from 4.25%, but only after a tight 5-4 vote by the MPC, which expects headline inflation to hit 4% soon, double its 2% target.

(Source: Reuters)