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U.K. rate of jobs growth remain strong in three months to May, jobless rate unchanged at 4.2 pct

The U.K. labor market report indicated that the rate of jobs growth continued to be solid in the three months to May with employment rising by 137,000, coming above consensus expectations of a 115k rise. In spite of ongoing uncertainties over the U.K.’s longer-term economic outlook, the latest figures imply that near-term economic trends continue to be strong.

Beneath the headline rise in employment, the details were also positive. The number of people working full time rose 177,000, while the number of people working part-time dropped 40,000 over the same period implying that some people had switched away from part-time to full-time employment.

Further falls in joblessness were also seen, but not enough to push the jobless rate lower, which remained same at 4.2 percent. Such a jobless rate – matching the lows seen since the 1970s – has historically indicated a tight labor market.

While measures of wage growth were comparatively unchanged in today’s report, the strength of hiring intention surveys and, more widely, of economic activity imply that demand for labor is expected to stay solid in the months ahead, noted Lloyds Bank in a research report.

Meanwhile, evidence from pay settlement reports, these factors show that wage growth should indicate further signs of acceleration. While an ongoing recovery in wage growth is expected to underpin modest rate hikes from the Bank of England – with a 25 basis points rise in Bank Rate likely next month – a more significant rise in pay would possibly be required to elicit a more aggressive response from the Monetary Policy Committee, added Lloyds Bank.

At 14:00 GMT the FxWirePro's Hourly Strength Index of British Pound was neutral at -37.6994, while the FxWirePro's Hourly Strength Index of US Dollar was slightly bullish at 62.893. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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