Closing post
Time for a recap
Britain’s employment market appears to have weakened, with unemployment rising in the last quarter and employment down.
The latest labour market report shows that unemployment rose by 159,000 in the last three months, to 1.46 million, lifting the jobless rate to 4.3% from 3.8% in the previous quarter.
The increase in unemployment was largely driven by people unemployed for up to 12 months, with economists also concerned that economic inactivity rose.
Headline indicators for the UK labour market for May to July 2023 show:
— Office for National Statistics (ONS) (@ONS) September 12, 2023
▪️ employment was 75.5%
▪️ unemployment was 4.3%
▪️ economic inactivity was 21.1%
➡️ https://t.co/aaVxfzo00f pic.twitter.com/MDvFPLMccd
The weakening sparked calls for the Bank of England to halt its cycle of raising interest rates, weakening the pound, although City traders broadly expect another rise next week, from 5.25% to 5.5%.
But pay growth accelerated, with bonus payments to NHS and civil servant staff pushing up total earnings by 8.5% per year in the quarter, the highest on record.
That should mean a bumper pension increase next April, under the triple lock system….
…except there are reports that the government could tweak the terms of the triple lock to strip out the impact of those bonuses, meaning a smaller increase.
Work and Pensions Secretary Mel Stride has insisted that the UK government remains committed to the triple lock.
The earnings figures could also be used to set rail fare increases across England next year:
High interest rates have pushed more borrowers into missing mortgage payments. The value of UK residential mortgages in arrears jumped to a seven-year high in the last quarter, Bank of England data shows.
Incoming BoE deputy governor Sarah Breeden has predicted that UK GDP will be “relatively flat” over the next couple of years. Breeden also warned MPs that the risks to inflation are to the upside, and that unemployment is likely to rise in the coming months.
In other news…
A pint of beer during the busiest periods will cost drinkers 20p more under a “dynamic pricing” system introduced by Britain’s largest pub group.
Stonegate Group, which owns chains including the Slug & Lettuce and Yates’s, said it was raising prices at 800 of its venues during peak times, such as weekends, to help cover soaring costs.
The owner of Primark said its full-year profits would be higher than previously expected, helped by strong sales of Barbie T-shirts, cargo shorts and boho dresses, as well as price increases.
The company behind the budget clothing chain, Associated British Foods, said cargo shorts, linen blend T-shirts and sliders, as well as boho and paisley dresses and its Moroccan-inspired matching outfits for all the family had all sold well over the summer.
Resale of event tickets for profit should be outlawed, the managers of artists have said, as they called on ministers to reconsider a crackdown on touts and “rip-offs” on websites such as Viagogo and StubHub.
Grocery price inflation in the UK has slowed to its lowest level in more than a year, but it remains in double digits and most consumers still worry about rising supermarket bills.
Annual supermarket inflation dropped for the sixth month in a row, to 12.2% in the four weeks to 3 September, according to the latest data from the analysts Kantar.
The world’s demand for oil, gas and coal will begin to decline this decade in “the beginning of the end” of the fossil fuel era, according to the global energy watchdog.
Work and Pensions Secretary Mel Stride has insisted that the UK government remains committed to the triple lock.
But…. Stride also stressed the need for any increases to take into account “affordability and the position of the economy”.
That’s an intriguing approach, given today’s reports that the UK is considering tweaking how the lock works, to reduce the cost of April’s increase.
Asked whether the triple lock will be based on today’s average annual earnings growth figure of 8.5%, in the three months to July, Stride said:
“There clearly is a difference if you take into account the non-consolidated elements of pay in recent times, but these are all decisions that I have to take with the Chancellor as part of a very clear process, a statutory process actually, that I go through in the autumn.
“So I didn’t want me to get into the weeds of exactly how I’m going to go about that. But the overarching point about the triple lock is that we remain committed to it.”
Put to him that he was not ruling out using a lower figure based on earnings without bonuses, around 7.8%, Mr Stride said: “I’m not going to get drawn into those kinds of questions.”
As covered this morning, basic pay excluding bonuses rose by 7.8% in the last year, less than total pay (which was bolstered by one-off payments in the NHS and civil service staff).
Updated
