"The rate of UK unemployment continued to edge up during October, as the confidence sapping budgetary pre-amble took its toll on the UK jobs market. With all the noise, speculation and damaging sentiment, it is no surprise that UK businesses put off hiring in October. These figures should come as no surprise to the Chancellor and the Government, businesses need an environment of confidence in order to thrive, it is clear to anyone that this has been lacking in the recent past."
"Despite unemployment ticking up, pay growth came in far higher than expected, good news for those in employment with the Christmas shopping season firmly underway. These latest figures coupled with very weak GDP growth last week will give the Bank of England sufficient reason to cut interest rates at its meeting on Thursday. This is despite inflation sitting stubbornly at 3.6% as of October. Further rate cuts from there onwards however will become progressively more difficult to justify as the competing forces vie for importance."
Unemployment rose to 5.1% in October from 5.0% in September, in line with market expectations. Annual total earnings growth came in at 4.7%, slightly down from 4.8% previously but above expected 4.4%. Budgetary uncertainty and confidence-sapping preambles reduced business confidence and led firms to delay hiring, contributing to the unemployment rise. Pay growth remained stronger than anticipated, supporting those in work ahead of the Christmas shopping season. Weak GDP growth combined with these labour market signals provides a rationale for the Bank of England to cut interest rates despite inflation at 3.6%, though further cuts will be harder to justify.
Read at London Business News | Londonlovesbusiness.com
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