Commenting on the latest ONS labour market data, Jake Finney, Senior Economist at PwC UK, says:
“The latest figures point to continued softness in the jobs market, with little evidence of a meaningful improvement. Outside the public sector, there is not much in the way of jobs growth. If anything, job losses appear to be accelerating in consumer-facing sectors, where payrolled employment has now been falling for around two years.
“This presents a dilemma for the Bank of England. With the jobs market remaining weak, it is difficult to see the case for raising interest rates. But the external backdrop is deteriorating again. Oil prices are now above $100 a barrel, close to the most adverse of the three scenarios the Bank outlined in July, raising the risk of renewed inflation pressures.
“Faced with these mixed signals, the Bank may prefer to hold rates steady until there is clearer evidence that higher energy prices are feeding through into broader inflation.”
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