United Kingdom: Employment falls by most in four years in Q3 amid Brexit uncertainty
November 12, 2019
The unemployment rate edged down to 3.8% in July–September from 3.9% in the previous rolling quarter. Employment, however, contracted by 58,000, which, while less than had been expected, marked the largest registered quarterly decline since May 2015, with fewer part-time jobs largely to blame. Moreover, the number of job vacancies continued to decline and nominal wage growth lost steam in July–September, even though wage growth continued to outpace inflation. These figures indicate that political uncertainty is weighing on jobs data, trimming the momentum of a previously robust labor market.
Looking further ahead, the outcome of upcoming elections and how they will shape Brexit will have a key bearing on the evolution of the labor market. Commenting on the uncertain outlook for the labor market ahead, James Smith, an economist at ING, noted:
“The jury is still out on whether this merely reflects a jobs market that is no longer tightening, or whether it is something more serious. Either way, this raises some question marks over wage growth – a key pillar in the Bank of England’s hawkish rationale over recent years.”
Author: Stephen Vogado, Economist