KPMG comments on today’s labour market figures - Sept 2023

"Pay growth continues to present a conundrum for the Bank of England” says Yael Selfin, Chief Economist at KPMG UK.

"Pay growth continues to present a conundrum for the Bank of England” says Yael Selfin.

“The labour market is starting to feel the weight of slowing activity as the UK economy faces several headwinds. The unemployment rate rose to 4.3%, vacancies are down below 1 million, and job-to-job flows have moderated suggesting that workers are less confident to switch positions.

“However, earnings growth came in at 8.5% overall and 7.8% excluding bonuses. Today’s pay data has significance not just for monetary policy but also for government spending, as the July figure determines the uprating of pensions next year under the triple lock guarantee.

“Despite clear signs of weakening momentum, we still expect the Bank of England to raise interest rates by 25 basis points next week, although the threshold for further increases may be hard to meet given the current economic outlook.”


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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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