The increase in salaries in the United Kingdom has continued to slow down as the number of vacancies and people at work has dropped, according to new figures.
Average weekly profits slowed down 4.6% compared to 5%, while remuneration for the exclusion of premiums continued to grow 5%According to data from the Office for National Statistics (ONS) for the three months to June.
This means that the difference between inflation – the price rate increases – and salary increases are shrinking and the labor market slows down. Inflation was held at 3.6% in June.
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The number of employees on the payroll fell in ten of the last 12 months, the falls concentrated in hospitality and retail, said the ONS. He then came that employers were faced with higher wage bills of the increase in minimum wages and increased national insurance contributions.
As a result, it is more difficult to get a job a year ago.
“The vacant posts, similarly, have continued to fall, also motivated by fewer opportunities in these industries,” said ONS economic statistics director Liz McKewn.
The number of vacant posts fell for the 37th consecutive period and in 16 of the 18 industrial sectors. Comments from employers suggested by companies may not recruit new workers or replace those who have left.
Unemployment remained 4.7% in June, as in May.
The ons, however, continued to advise prudence in the interpretation of changes in the monthly unemployment rate due to the concerns about the reliability of the figures.
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The exact number of unemployed is unknown, in part because people do not respond to investigations and do not respond to the phone when the ons.
The worst remains to come
Salary increases should fall more and layoffs should increase.
“Salaries growth is likely to weaken during the year, softening economic conditions, the increase in redundancies and high costs of personnel are increasingly emphasizing remuneration regulations,” said Suren Thiru, economic director of the Institute of Actors approved in England and Wales (ICAEW).
“The British job market faces more pain in the coming months with higher labor costs likely to raise moderately higher unemployment, in particular given the increasing concerns concerning additional tax increases in the budget for this fall.”
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What does this mean for interest rates?
While the wages of wages slow down, the fact that they are still above inflation means that interest rate decoders of the Bank of England could be cautious about new reductions.
A higher salary can increase in inflation. The central bank is mandated to reduce inflation to 2%.
But another drop in interest rates this year, in December, is currently expected by investors, according to London Stock Exchange Group (LSEG) data.
The evidence of a weakened labor market allow the justification of the interest rate last week cup.