UK Jobs Market Slows Further as Bank of England Considers Rate Cut

• Britain's unemployment rate hit its highest since the start of 2021, and private sector pay growth was the weakest in nearly five years in the run-up to finance minister Rachel Reeves' annual budget last month, official figures showed on Tuesday.
• The downbeat data reinforced the chances that the Bank of England will cut interest rates on Thursday to help the almost stagnant economy. The jobless rate edged up to 5.1% in the three months to October, its highest since the three months to January 2021, while private sector pay growth, excluding bonuses, slowed to 3.9% from 4.2%.
• "The UK's jobs market visibly buckled ahead of the budget," Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales, said. "The unrelenting uncertainty from a torrent of policy speculation and a slumping economy forced more firms to reduce recruitment and curb wage settlements." Official data last week showed the economy unexpectedly shrank by 0.1% in the three months to October.
• After months of media speculation over possible tax increases, Reeves announced £26Bn ($35Bn) of tax hikes in her budget on November 26. But she delayed the introduction of most of them and spared employers the hit that she imposed in her first budget a year earlier. Many employers have said they scaled back hiring this year after Reeves raised their social security contributions in October 2024.
• Many employers have said they scaled back hiring this year after Reeves raised their social security contributions in October 2024. A measure of payroll data provided by the tax office showed a monthly drop of 38,000 in November. A fall of 32,000 first reported for October was revised to show a decline of 22,000 people in payrolled employment.

(Sources: Reuters)