Cyprus Mail

UK’s hot labour market shows sign of cooling

london uk

Britain’s labour market remains tight, despite a fall in job postings by employers over the course of 2023 and broader weakness in the economy, figures from recruitment platform Indeed showed on Thursday.

At the start of December last year, there were 48 per cent more job postings on Indeed than before the COVID-19 pandemic. But on Dec. 1 this year, this had shrunk to 10 per cent.

“The UK economy enters 2024 facing strong economic headwinds. But the labour market continues to show resilience and the imbalance of labour demand and supply is only gradually easing,” Indeed economist Jack Kennedy said.

The Bank of England is closely watching Britain’s job market as it worries that labour shortages will keep wage growth high and make it hard to get inflation all the way back to its 2 per cent target after it hit a 41-year high of 11.1 per cent in October 2022.

Consumer price inflation in October this year was 4.6 per cent, above the rate in other major advanced economies.

Indeed data showed advertised salaries in Britain in the three months to the end of October were 7.0 per cent higher than a year earlier, compared with increases of 4.2 per cent in the United States and 3.8 per cent in the euro zone.

Britain’s official labour market data for the three months to the end of September showed a 7.7 per cent annual rise in average earnings excluding bonuses, down slightly from a record 7.9 per cent over the summer. October data is due on Dec. 12.

Unemployment was 4.2 per cent in the third quarter, up from 3.7 per cent at the end of 2022, although Britain’s statistics office has this data under review due to a sharp fall in response rates.

Indeed said the percentage of job postings offering the option of remote or hybrid working had dropped to 14.4 per cent by the end of October from an all-time peak of 16.3 per cent in early May, possibly reflecting slightly less competition for staff.

“The path to a soft landing remains open to the UK but there is still a long way to go and recession risks loom,” Kennedy said.

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