Commenting on the latest ONS labour market data, Jake Finney, Senior Economist at PwC UK, says:
“The latest ONS data shows the UK labour market continues to weaken. Payrolled employment is falling, unemployment is edging higher, and redundancies are picking up. Vacancies appear to be stabilising, but it will take time before that translates into a clear improvement in the headline indicators.
“More importantly for the Bank of England, pay growth is easing. The Bank’s preferred measure of private sector pay growth has fallen to 3.4%, broadly in line with expectations, while broader measures that include bonuses have slowed even more sharply. Wage growth is now much closer to rates consistent with the 2% inflation target than it was a year ago.
“With slack building in the labour market and inflation moving in the right direction, the case for further rate cuts is strengthening. A move as early as March cannot be ruled out.”
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