The latest ONS figures showed a familiar picture of gradual cooling in the UK labour market. Vacancies fell for the 26th consecutive month, with reductions seen across all industry sectors from June to August 2024. Though the unemployment rate dipped, ongoing methodology work to the Labour Force Survey means this figure should be taken with a pinch of salt.
At 1.6 unemployed people per vacancy, the labour market isn’t as tight as it was a couple of years ago. But overall, the market remains in reasonable shape.
Wage growth continues to ease broadly in line with the Bank of England’s expectations, down to 5.1% year-on-year in regular pay in the three months to July. Should it continue to fall back towards the 3-3.5% range generally considered consistent with the Bank’s 2% inflation target, that leaves the door open for further interest rate reductions before the end of the year.
