UK Labor Market Cools In May
(RTTNews) - UK wage growth softened in the three months to May period suggesting that the labor market cooled further and revived hopes of interest rate cuts.
The unemployment rate came in at 4.4 percent in March to May period, unchanged from the preceding three months, the Office for National Statistics said Thursday. The figure matched economists' forecast.
The employment rate was estimated at 74.4 percent in the three months to May. Payroll employment increased 16,000 from the previous month to 30.4 million in June. In the second quarter, the number of vacancies decreased by 30,000 sequentially to 889,000. Vacancies declined for the 24th consecutive period but remained still above pre pandemic levels.
Average earnings excluding bonus logged an annual growth of 5.7 percent in three months to May, matching expectations and slower than the 6.0 percent increase in April.
Earnings including bonus also grew 5.7 percent in three months to May, as expected.
Data showed that an estimated 49,000 working days were lost due to labor disputes.
Although the wage data is encouraging, Capital Economics' economist Ashley Webb said the timing of the first interest rate cut will be in September instead of August. Still it is a close call, he noted.
The cumulative effect of weak GDP growth last year together with some improvement in supply this year mean that services inflation will fall to 3.5 percent in early 2025 and wage growth to slow to 3.0 percent by the end of 2025, Webb added.
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