Britain's Labour Market Cools Amid Economic Uncertainty
The UK's labour market has cooled as available workforce numbers rise at the fastest rate since the COVID-19 pandemic. This data supports the Bank of England's interest rate-cutting strategy, as high employment slack and still-high inflation signal slower economic momentum despite ongoing geopolitical and economic challenges.
The UK's labour market is experiencing a significant cool-down, as the number of people available for work has surged at an unprecedented rate since the COVID-19 pandemic. This development aligns with the Bank of England's interest rate-cutting plan.
Data from the Recruitment and Employment Confederation and accountants KPMG reveal that the staff availability index increased to 66.1 in June, the highest since November 2020. This reading, closely watched by the Bank of England, exceeds the growth level of 50 and suggests increasing labour market slack.
Despite this momentum loss, Jon Holt of KPMG states that the hiring hesitation is due to ongoing geopolitical tensions and technological advances rather than a sudden economic downturn. Official figures due soon are anticipated to confirm a slowdown in pay growth, following unexpected economic contraction in May.
(With inputs from agencies.)
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