UK job vacancies fell to a five-year low in the three months to July as smaller firms cut back on hiring, while private-sector wage growth slowed further. Analysts said the figures make a Bank of England rate increase in September unlikely.
Vacancies drop to a five-year low
Job vacancies in the UK fell to 707,000 in the three months to July, the Office for National Statistics said, the lowest level in more than five years. Small businesses cited labour and operating costs as reasons for pulling back on recruitment.
The unemployment rate held at 4.9%, while payrolls fell by 13,000 in July. The ONS said the labour market picture was little changed overall, with softening still evident across the jobs market.
Wage growth cools in the private sector
Regular earnings, which exclude bonuses, grew at an annual pace of 3.5% in the three months to June. But the headline figure masks a widening gap: private-sector pay growth eased to 2.8%, its weakest pace since October 2020. Public-sector pay rose 6.1%, reflecting the timing of the latest NHS pay awards.
Analysts said the data leaves little sign that wage pressures are building. According to KPMG: "there is little reason for the Bank of England to shift course", said Yael Selfin, chief economist at KPMG.
Bank of England outlook
Analysts said the data made a Bank of England interest rate rise at its September meeting unlikely, with underlying wage pressures remaining contained.
The British Chambers of Commerce said confidence among firms is at a post-pandemic low, with planned changes to zero-hours contracts prompting many employers to reassess recruitment plans.
Sources: BBC News, The Guardian, Investinglive
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