Following indications of a slowdown in the UK job market, Bank of England regulators are anticipated to keep rates of interest at their present level of 5.25% for the second consecutive time next week.
According to official data that was made public on Tuesday, the jobless rate went up from 4% in the March–May quarter to 4.2% in the June–August period.
In accordance to the Department for National Statistics (ONS), during the same time period, the number of persons in work decreased by 82,000, or 0.3 percentage points, bringing the rate of employment down to 75.7%.
Concurrently, a survey conducted on business activity in the UK revealed that the country’s economy was contracting due to a decline in output within the manufacturing and services sectors.
According to data from data provider S&P, businesses were making cuts in response to worries that growing living expenses and high borrowing rates would put more pressure on customers.
The S&P Global/Cips preliminary UK composite production index increased somewhat from 48.5 in September to 48.6 in October, although this was the third consecutive month that the reading fell below 50, indicating a contraction.
According to a CBI study, manufacturers expressed concerns about “sentiment deteriorating, output levels falling and [firms] growing more cautious over their hiring decisions and investment plans.”
On November 2, the Bank of England will determine whether to raise borrowing costs in an effort to further curb inflation, which has persisted at an unacceptably high level.
After 14 straight increases, the monetary policy committee ended its 14-day series of rate hikes in September by leaving the benchmark rate steady.
Mortgage holders may have some respite as analysts predicted that the deterioration of the labor market would persuade the monetary policy panel (MPC) of the central bank to keep interest rates on hold. They cited the fall in the total amount of job openings posted by companies, which fell to 988,000 in August after a 43,000 decrease, below 1 million for the initial time in two years, according to Tuesday’s ONS data.
The ONS unexpectedly postponed the release of its monthly employment and unemployment statistics for the United Kingdom last Tuesday due to a low labor force participation rate.