UK October ILO unemployment rate 5.1% vs 5.1% expected

• Prior 5.0%
• Employment change -17k vs -67k expected
• Prior -22k
• Average weekly earnings +4.7% vs +4.4% 3m/y expected
• Prior +4.8%; revised to +4.9%
• Average weekly earnings (ex bonus) +4.6% vs +4.5% 3m/y expected
• Prior +4.6%; revised to +4.7%
• November payrolls change -38k
• Prior -32k; revised to -22k

The jobless rate in the UK continues to tick higher, with payrolls change for November also declining once more. That continues to reinforce a softening labour market picture, though wages are holding up somewhat still. The BOE will have to be mindful with the unemployment rate creeping up to its highest since February 2021. Meanwhile, the UK employment rate is seen dropping further to 74.9% – down 0.3% on the quarter and keeping well below its pre-pandemic levels.

Real wages (after accounting for CPI) is seen declining but just marginally, with total pay seen at 0.7% and regular pay 0.5% in real-terms in the three months to September.

As for payrolls in general, we are seeing the number of payrolled employees continuing to fall further and now reach its lowest since September 2023.

The data continues to underscore that the UK jobs market is softening and will keep the pressure on the BOE to cut rates down the road. A 25 bps rate cut for this week is very likely, even if the voting intentions might be marginally in favour of a rate cut. The market is pricing in ~92% odds of a move on Thursday.

This article was written by Justin Low at investinglive.com.