Key facts
- Britain's job market has stabilized at weak levels.
- Average wage growth, excluding bonuses, rose 3.4% in the three months to May, matching April's pace and marking the joint-lowest since October 2020.
- The unemployment rate was 4.9% in the three months to May.
- Private sector pay growth was 2.9% in the three months to May, the weakest since 2020.
- The number of workers on company payrolls fell by 4,000 in June.
- Job vacancies decreased by 7,000 to 712,000 in the three months to June.
Britain's job market has shown signs of stabilization at weak levels, according to official data for the three months to May. Average wage growth, excluding bonuses, rose by 3.4%, matching the pace of the previous period and marking the joint-lowest increase since October 2020. This figure aligns with economists' forecasts and is unlikely to pressure the Bank of England to raise interest rates.
The unemployment rate stood at 4.9% in the three months to May, slightly below expectations of 5%. However, the jobless rate for individuals aged 16-24 rose to its highest level since 2014 at 16.4%.
Private sector pay growth, a key indicator for the Bank of England, was 2.9% in the three months to May, the weakest rate recorded since 2020. Analysts suggest this indicates contained domestic wage pressures, falling below levels consistent with the Bank's inflation target.
Separate figures based on tax office data indicated a fall of 4,000 workers on company payrolls in June. Job vacancies also decreased by 7,000 to 712,000 in the three months to June, down from a peak of around 1.3 million in 2022, with smaller firms reportedly reducing hiring.
Businesses are reportedly facing cost pressures and operating in an uncertain environment, awaiting economic direction from the new Prime Minister Andy Burnham, who took office recently. The government is expected to announce a 10-year economic plan later this year. The Bank of England is closely monitoring potential longer-term inflation pressures stemming from global events, such as the Iran war's impact on energy prices.