Unemployment in United Kingdom
United Kingdom - Unemployment
Wages rise at decade-high pace in Q2; unemployment rate inches up
The unemployment rate rose to 3.9% in the second quarter, up from 3.8% in the previous rolling quarter and in line with FocusEconomics panelists’ expectations. However, the unemployment rate remains extremely low by historical standards. Employment surged quarter-on-quarter, although this was solely due to greater part-time employment, and the increase was not enough to fully offset the number of people joining the labor market. Moreover, job vacancies continued to fall, suggesting a possible loss of labor market momentum amid acute Brexit uncertainty. Positively, nominal earnings growth excluding bonuses rose from 3.6% to 3.9%—a ten-year high—comfortably outpacing inflation and boosting consumers’ purchasing power.
Looking ahead, the labor market should remain a source of strength, although Brexit uncertainty could keep a lid on hiring in the coming months. Our panelists see the unemployment rate ticking up marginally going forwards but staying low, while nominal wage growth should continue to comfortably outpace inflation, supporting household spending.
Regarding the possible implications for monetary policy, James Smith, an economist at ING, comments:
“UK wage growth has hit another post-crisis high amid ongoing skill shortages in the jobs market. This suggests it may be too early to be talking about Bank of England rate cuts, although as ever, it all depends on Brexit.”
Our panelists currently see the unemployment rate averaging 3.9% in 2019 and 4.1% in 2020, while real disposable income is seen increasing 2.0% in 2019 and 1.3% in 2020.
United Kingdom - Unemployment Data
|Unemployment (% of active population)||7.6||6.2||5.4||4.9||4.4|
5 years of economic forecasts for more than 30 economic indicators.
United Kingdom Unemployment Chart
Source: Office for National Statistics (ONS).
United Kingdom Facts
|Bond Yield||0.61||-3.04 %||Jul 31|
|Exchange Rate||1.22||-0.35 %||Jul 31|
|Stock Market||7,587||-0.26 %||Jul 31|
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August 14, 2019
Consumer prices were flat month-on-month in July, matching June’s reading, as lower prices for clothing and footwear offset higher prices for recreation and culture.
August 13, 2019
The unemployment rate rose to 3.9% in the second quarter, up from 3.8% in the previous rolling quarter and in line with FocusEconomics panelists’ expectations.
August 9, 2019
Industrial production fell 0.1% in June over the prior month according to the Office for National Statistics, contrasting May’s revised 1.2% rise (previously reported: +1.4% month-on-month) and driven by a contraction in the manufacturing sector.
United Kingdom: Economy contracts in Q2 for first time in nearly seven years amid destocking and tumbling fixed investment
August 9, 2019
The UK economy shrank 0.2% in quarter-on-quarter seasonally-adjusted terms in Q2, contrasting Q1’s 0.5% quarter-on-quarter expansion.
August 5, 2019
The IHS Markit/CIPS UK services Purchasing Managers’ Index (PMI) increased from 50.2 in June to 51.4 in July.