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United Kingdom Unemployment August 2023

United Kingdom: Labor market shows further signs of softening midway through Q3

According to the ONS, in May–July the unemployment rate registered 4.3%, up 0.1 percentage points from the previous rolling quarter and the highest rate since September 2021. In addition, vacancy numbers continued to decline in the three months to August, while employment decreased marginally in August according to experimental data. More positively, average growth in regular pay in the three months to July was the highest since comparable records began in 2001.

Overall, these figures show that the labor market is softening, and our panelists see the unemployment rate remaining above 4% for the rest of this year.

On the data, ING’s James Smith said:

“The ratio of unfilled job openings to the number of unemployed workers, a ratio that BoE Governor Bailey has consistently referenced, is falling quickly now and will more-than-likely be back to pre-Covid levels within the next couple of months. Unlike the US, where so far a fall in vacancies hasn’t been paired with an increase in joblessness, the UK is experiencing a undeniable increase in the number of people unemployed for less than six months. Unsurprisingly that tends to trigger increases in longer-term unemployment with a lag.”

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