KPMG comments on today’s labour market figures

“Slowing pay growth signals further weakness for labour market ahead” says Yael Selfin, Chief Economist at KPMG UK.

“Slowing pay growth signals further weakness for labour market ahead” says Yael Selfin.

“The unique circumstances which fuelled pay growth, including strong demand for workers and higher pay demands to keep pace with the sharp rise in the cost-of-living, have receded in recent months. Pay growth fell for a third month in a row, pointing to easing pressure.

“The marked slowdown in pay growth will ease the Bank of England’s concerns of a potential wage-price spiral, which could lead to faster falls in inflation. Vacancies are also expected to fall further, which could see pay growth normalising towards levels consistent with the inflation target by the end of the year. This will likely bolster the case for interest rate cuts later this year.

“Pay growth fell to 6.6% in November, down from 7.2% a month earlier as the labour market continued to cool. While unemployment remained relatively low at 4.2%, it is expected to continue trending upwards this year as economic activity remains subdued.”     



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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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