KPMG comments on today’s labour market figures

“The labour market could ease further as the economy weakens” says Yael Selfin, Chief Economist at KPMG UK.

“As a myriad of headwinds hit the economy later this year, we expect the labour market to loosen from current levels. This will weaken the bargaining power of employees, while a more forceful response from the Bank of England to tame inflation should also help lessen pay demands.

“Nominal growth in regular pay continued to be dwarfed by inflation in June, leading to further erosion in households’ purchasing power. The bad news for employees is that real pay growth is unlikely to return to positive figures for some time.

“As economic growth weakens, lower customer demand should put less pressure on employers to recruit new staff. Nevertheless, our forecast envisages the unemployment rate could peak at 5.4 per cent in 2024, a relatively low level by historical standards.”

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KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 15,300 partners and staff.  The UK firm recorded revenue of £2.43 billion in the year ended 30 September 2021.

KPMG is a global organisation of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 145 countries and territories with more than 236,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.