UK Unemployment Takes Its Slow Stride Into 2024
April’s 4.6% unemployment figure is a gentle reminder that the UK’s labour market is inching upward as the 2024 Autumn Budget starts to set things in motion.
Why the Numbers Are Shifting
- Employer NICs have crept up, thanks to the April 6th changes.
- The minimum wage also rose, adding a double‑whammy for businesses.
- Companies are tightening their hiring nets, leaving the job vacancy rate in a slump.
- Workers are racing to stay put, uneasy about the future—security becomes the new go‑to.
Growth Vs. Jobs: A Disconnected Dance
We saw a surprisingly strong start to the year with a 0.7% GDP bump in Q1, but the labour market hasn’t felt that heat. One‑off boosts—think export spikes fueled by looming tariff rumors—won’t keep the job pipeline throbbing. The Chancellor’s upcoming spending review offers a chance to reignite job creation, possibly by injecting funds into infrastructure and public services. Still, the government’s finances are stretched thin, raising concerns about other public spending fronts.
The Tight Labour Market: Still Keeps Wage Growth Rising
Even with a modest wage growth slowdown to 5.2% (excluding bonuses), real earnings beat inflation. That’s good news for shoppers, but it’s also a double‑edge sword: rising wages without a corresponding productivity lift can nudge inflation higher—something the Bank of England is keeping a close watch on.
Bank of England’s Countdown to Rate Cuts
As the Monetary Policy Committee debates the pace of interest rate cuts, wage growth sits at the forefront of the conversation. A 0.7% reduction from February to April shows a welcome shift, yet the Committee will want a steady trajectory before rolling out a more aggressive rate‑cutting plan. When the next meeting in July rolls around, those cautious about inflation will definitely be eyeing this trend.
What This Means for You
- Job prospects are more cautious, but the market remains relatively resilient.
- Wages are creeping up, helping keep consumer spending bright.
- Keep a close eye on the Bank’s rate decisions—slow cuts could keep borrowing costs comfortable.
Stay tuned for the next phase of the budget storyline. The labour market drama is still unfolding, and we’re here to keep you in the loop.
