Economists (and investors) will be paying close attention to latest UK unemployment figures when they are released next Tuesday. November data will follow on from increases in the national living wage and employers’ national insurance contributions announced in October’s Budget. While these changes don’t come in until April, employment surveys have already been showing weakness.
Accordingly, Pantheon Macroeconomics analysts think next week’s figures will show employment “stalling” on a month-to-month view, even though they expect the headline unemployment rate to be unchanged at 4.3 per cent. Notably, they also think pay growth will tick up again. That growth is unlikely to survive much more weakness in the jobs data, but it underlines why the Bank of England is treading carefully with rate cuts at the moment.