Some moderation in UK employment growth likely in Dec

UK ILO employment growth data is scheduled to be released on Wednesday. Data last month showed that UK employment rose by a robust 267k, 0.9% q/q, in the 3 months to Nov, but the recovery was not as broad-based as the headline figures suggest. Although self-employment made a large contribution  of 121k, 2.7% q/q, the more meaningful 'full-time employee jobs' series rose just 111k, up 0.6% q/q.

Also, the recent survey data suggests some moderation in employment growth likely. The services PMI employment index rose in Jan, but remains below its 2015 average, while the employment indices in the manufacturing and construction PMIs both deteriorated sharply.

"We forecast a rise in total employment of 230k in the three months to December. This pace of employment growth would be expected to lower unemployment by around 80k in the three months to December and nudge the unemployment rate down to 5.0%. On the claimant count measure we forecast a small fall of 2k in January, leaving the unemployment rate at 2.3%." notes RBS in a report to clients.