By Joshua Kirby
The U.K.'s jobless rate stayed steady in the three months to September though average wage growth eased a little, a boost for the Bank of England's efforts to bring down still-high price inflation.
The unemployment rate stood at 4.2% in the three-month period, unchanged from the previous three months, according to data from the Office for National Statistics published Tuesday. This was in line with the rate expected by economists, according to a poll by The Wall Street Journal.
Nevertheless, total vacancies fell to their lowest point since mid-2021 at 957,000 in the three months to October, the figures showed, in a sign that the labor market is cooling.
Average wages, not including bonuses, also eased to 7.7% between July and September, compared with 7.9% over the previous three-month period, when it reached a record high, the ONS said. This was also in line with economists' expectations.
The combination of further increases in labour-market slack and falling inflation should help to slow wage growth further in the coming months, said Pantheon Macroeconomics' Samuel Tombs, writing in a note.
But a conflict remains between the BOE's efforts to reduce inflation and the need for jobs, said Nick Saunders, chief executive of stock-trading platform Webull UK.
"If falling unemployment is not balanced by lower inflation, this presents the government with an unenviable choice," Saunders said in a note.
Tuesday's data are part of a new series of jobless statistics that the ONS is publishing using additional sources, as it updates its traditional survey to shore up the reliability of its key labor-market statistics, closely watched by rate setters at the BOE.
Easing wage growth is a boon for the BOE ahead of Wednesday's inflation data for October, since high pay has helped keep price rises rapid. It suggests that a tight monetary policy is now having the desired effect, said Ashley Webb, U.K. economist at Capital Economics.
Inflation held steady in September as services prices picked up pace, though economists expect the rate to dip again in following months. Along with other Western central banks, the BOE has paused its previous cycle of interest-rate rises as inflation cools, holding the key rate at 5.25% for the last two meetings, but has signalled it doesn't expect to be start cutting rates anytime soon. Indeed, wage growth should ease so slowly that the bank won't be able to look at rate cuts until the late next year, Webb said.
"But when rates are eventually cut, we think they will be reduced further than most expect," he said in a note.
Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby
(END) Dow Jones Newswires
11-14-23 0314ET
