Job vacancies fall – but not by enough to lower interest rates

Has the Labour market cooled down enough for the Bank of England to change its mind on interest rates? Almost certainly not, based on the latest data from the Office for National Statistics, out this morning. The reintroduction of the Labour Force Survey data, which had to be suspended temporarily due to poor and limited feedback, has now been reinstated, showing fewer changes in the labour market than experts were hoping to see.

Job vacancies fell for the nineteenth consecutive time – but not by much. Vacancies were down to 932,000 on the quarter – a fall of 26,000, still well above pre-pandemic levels. Despite expectations that the unemployment rate would rise slightly, it fell again in the three months to December, from 3.9 per cent down to 3.8 per cent. These numbers are meant to be treated with ‘additional caution’ as the Labour Force Survey is still lacking critical data, but the evidence from the new reporting scheme continues to show signs of a tight labour market.