Commenting on the latest ONS labour market data, Jake Finney, Senior Economist at PwC UK, says:
“The latest ONS data offers the first tentative signs that the wider global economic backdrop is beginning to weigh on the UK labour market. After remaining broadly stable for much of the past year, vacancies fell by 28,000, taking them to their lowest level in five years. The one saving grace for households is that pay is still growing in real terms, even as inflationary pressures build.
“This leaves the Bank of England in a difficult position. The inflation outlook has deteriorated, making a return to target this year look unlikely. But the labour market is much softer than it was during the last inflation surge, reducing the risk that higher energy prices trigger broader inflation pressures. That makes further rate rises harder to justify, though this stance will become increasingly difficult to maintain if inflation continues to rise.”
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