KPMG comments on today’s labour market figures

“Tight labour market will compel the Bank of England to tighten the screws further” says Yael Selfin, Chief Economist at KPMG UK.

“Tight labour market will compel the Bank of England to tighten the screws further”

“The unemployment rate remains close to its lowest level in almost half a century, underscoring the labour market’s continued tightness. Nonetheless, we expect unemployment to continue to rise in the coming months as higher interest rates and uncertainty around the economy could see firms cut back on hiring.

“The number of days lost to industrial action fell back to 220,000 in January, down from its highest level in over a decade in December. However, we estimate that this was still enough to reduce monthly GDP by around 0.05%, although more recent data signal a diminishing impact from strikes in February.

“Pay growth remains close to its record highs. While the annualised three-month measure for the private sector, which is closely watched by the Bank of England, dropped to 5.5%, more timely indicators from the KPMG and REC UK report on jobs have been little changed recently. Coupled with stronger-than-expected GDP data, this should provide enough evidence for the Bank to raise rates when it meets next week.”


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KPMG LLP, a UK limited liability partnership, operates from 20 offices across the UK with approximately 17,000 partners and staff. The UK firm recorded a revenue of £2.72 billion in the year ended 30 September 2022.  

KPMG is a global organisation of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 143 countries and territories with more than 265,000 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. 

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