MNI BRIEF: Mixed UK Labour Data Muddies Water For BOE

The UK labour market continued to contract in the three mnoths to July, the latest data from the Office for National Statistics showed on Tuesday, although wage growth continues to push ahead, with real total pay turning positive for the first time since October 2021.

According to the ONS, unemployment rose to 4.3% -- a near two-year high -- in the latest reporting period, while vacancies across the economy fell below a million for the first time since the end of the pandemic.

But even as employment slows, the continued strength of wage growth will be a concern to many policymakers on the Bank of England's Monetary Policy Committee. Total real wages rose a nominal 8.5%, boosted by one-off payments across the National Health Service and wider public sector. Real total earnings rose 0.6% y/y against CPI, the first positive real wage growth since October 2021.

"The proportion of people neither working or looking for a job is slightly up, with more students, as well as the long-term sick reaching yet another record," ONS director of economic statistics Darren Morgan said. (MNI INTERVIEW: UK's Inactive Population Steadies At High Level)