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UK Labour Market Cools as Payrolls Drop and Vacancies Hit Four-Year Low

Businesses blame April’s rise in employer National Insurance contributions for a spike in labour costs that has deterred new hiring

A drone view of London's Canary Wharf financial district, two days before the government presents its critical pre-election budget, in London, Britain, March 3, 2024. REUTERS/Yann Tessier/File Photo
Hiring intentions in the private sector have fallen to their lowest in any period outside the pandemic
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Overview

  • Official figures show a provisional fall of 8,000 payroll jobs in July, extending declines in ten of the last 12 months
  • Job vacancies fell by 44,000 to 718,000 in the three months to July, marking the 37th consecutive quarterly drop
  • The unemployment rate remained at 4.7% in the three months to June, its highest level since 2021
  • Regular pay growth held at about 5%, while starting salaries rose at their weakest pace since March 2021
  • The Bank of England has cut its policy rate to 4% but is split over further easing as wage pressures and cost shocks persist