Labour Market Snapshot: A Few Surges in the Payroll Sea
The latest employment figures show a modest climb, with the employment rate standing at 75%—a slight uptick from the previous quarter.
Unemployment and Economic Inactivity
- Unemployment: 4.0% (vs. 4.1% in the summer months; market expectations: 4.1%)
- Economic Inactivity: 21.8% (down from earlier figures)
Wages on the Rise
Annual wage growth settled at 3.8%, a touch behind the 4.0% seen earlier but comfortably above inflation. This is a solid sign that workers are getting paid more than price rises.
Investor Perspective
Investment Manager Nicholas Hyett of Wealth Club commented, “From the Chancellor’s viewpoint, this data is almost perfect. Unemployment and inactivity dip while employment and wages rise—particularly beyond inflation. No creases of recession here, thank you very much.”
He added that some wage growth is a by‑product of summer bonuses to NHS and civil‑service staff, yet the UK still feels “in reasonably good health,” with the resilience to absorb higher taxes if needed.
Political Echoes
Not only does the Chancellor feel the sweet spot this quarter, but former Treasury colleagues at Threadneedle Street also get a moment of relief. The steady drop in wage growth signals that inflation is easing. Fingers crossed that tomorrow’s CPI numbers keep the UK economy from turning into a pumpkin at the worst possible moment.
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