KPMG comments on today's labour market data
A winter of discontent adds further pressure on the labour market” says Yael Selfin, Chief Economist at KPMG UK.
A winter of discontent adds further pressure on the labour market” says Yael Selfin.
“The wave of public sector strikes resulted in nearly half a million working days lost in November, with average hours worked falling by 1% on the previous quarter. The availability of labour has likely come under further pressure around the turn of the year, with the industrial action gathering momentum on top of the ongoing squeeze on the labour force due to early retirement and ill health.
“Continued frictions in the labour market have kept the unemployment rate low, but this is set to reverse as employers adjust their headcount in light of rising costs and falling demand. We expect the unemployment rate to peak at around 5.6% by the middle of next year.
“Regular pay growth picked up to 6.4%, its highest rate since mid-2021 when it was boosted by the unwinding of furlough effects. Together with last week’s stronger than expected GDP data, we anticipate this will provide enough evidence for the Bank of England to clinch another interest rate increase at its February meeting.“
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