Wages are up – but the Bank won’t be happy about it

The labour market continues to show signs of becoming less tight – but this won’t be fast enough for the Bank of England’s liking. The UK unemployment rate rose to 4 per cent – up 0.2 per cent on the quarter. But this relatively small change is indicative of more people moving off the economic inactivity list, which fell by 0.4 per cent between March and May: a change that the Office for National Statistics largely attributes to men in this latest update. 

Meanwhile the number of job vacancies in Britain fell for the twelfth time in a row: down 85,000, but still sitting at 1,034,000. Vacancies are now significantly down from their peak of over 1.2 million, but the great worker shortage continues to fuel inflation, as the UK economy struggles to fill hundreds of thousands of jobs in the labour market, compared to before the pandemic.