Recent statistics from the UK's Office for National Statistics (ONS) suggest a further easing in the country's labour market conditions. Key figures for July revealed the ILO unemployment rate held steady at 4.9%, aligning with expectations, while the employment change also met forecasts at 67,000. However, more current data points to a notable shift.
Average weekly earnings, including bonuses, saw a slight slowdown, rising by 3.9% in the three months leading to July, down from a revised 4.2% in the prior period. Excluding bonuses, wage growth remained consistent at 3.5%. These indicators provide context for retail forex and CFD traders, as a softening labour market could influence the Bank of England's monetary policy decisions, potentially impacting the value of the British Pound (GBP) against other major currencies.
A more immediate snapshot comes from the preliminary August payrolls data, which recorded a decrease of 26,000 payrolled employees. This follows a revised decline of 19,000 in the previous month, bringing the total number of payrolled employees to 30.2 million. On an annual basis, payrolls have decreased by 145,000 compared to a year ago, extending a broader two-year trend of declining payrolled employment highlighted by the ONS.
Implications for Monetary Policy
While the overall picture suggests a continued cooling, these figures do not drastically alter the prevailing sentiment regarding the Bank of England's upcoming policy meeting. The jobless rate and employment rate have largely stabilised, but the more recent payroll and wage growth deceleration could reinforce arguments for a less aggressive stance on interest rate hikes, or even a pause, depending on other economic factors.
The sustained trend of decreasing payrolled employees and moderating wage growth signals a less inflationary pressure from the labour market, which could influence future monetary policy decisions by the Bank of England.
📰 Based on reporting from: ForexLive →