What happened
The UK labour market is showing continued signs of slowing, according to data released by the Office for National Statistics (ONS), even as the wider economy has shown unexpected resilience.
Between May and July, the employment rate remained broadly unchanged at 75.1%, down 0.1 percentage points from a year earlier, while the unemployment rate held at 4.9%, up 0.2 percentage points year on year.
Market vacancies continued to decline amid weak hiring appetite, falling by 8,000 in June-August compared with three months earlier. The ONS attributed the reluctance to hire to high labour costs.
Employee income also declined, with total pay including bonuses rising 3.9% year on year in May-July, down from 4.2% three months earlier.
Why it matters
The slowdown in the labour market is expected to limit the further impact of inflationary pressures, which could ease the case for tighter monetary policy.
Market expectations suggest the Bank of England will keep its current interest rate unchanged.
Key facts
The employment rate stood at 75.1% in May-July, 0.1 percentage points lower than a year earlier.
The unemployment rate remained at 4.9% in May-July, 0.2 percentage points higher than a year earlier.
Market vacancies fell by 8,000 in June-August compared with three months earlier.
Total pay including bonuses rose 3.9% year on year in May-July, down from 4.2% three months earlier.
The ONS said businesses are reluctant to hire because labour costs are too high.
What to watch next
Whether the Bank of England maintains its current interest rate, as market expectations currently suggest.
Whether the labour market slowdown continues to ease inflationary pressures in the coming months.
