18 July 2018

  |  CBI Updates Team

News

CBI/Pertemps labour market update July 2018

The ONS’ latest labour market data paints a familiar picture —strong employment growth and falling unemployment.

CBI/Pertemps labour market update July 2018

CBI/Pertemps labour market update July 2018

But despite high vacancies, pay growth has slipped to a six-month low, keeping up the pressure on people’s living standards. This leaves the MPC’s decision on a knife-edge when it meets to set interest rates in a couple of weeks’ time.

Employment remains at a record high, with growth similar to the relatively strong rates seen over most of 2017, bringing the employment rate back to a joint record high since 1971.

Unemployment decreased once again, returning the rate to a 42-year low. A very small margin of slack in the labour market likely remains among those who would prefer to work longer hours or in permanent employment.

However, the performance of the labour market has not been matched by stronger and more sustained real wage growth. Instead, pay growth has slipped putting pressure on people’s living standards.

The UK’s regions and nations have seen a mixed picture in employment while unemployment levels have remained broadly unchanged.

Labour productivity has grown for a third quarter in a row, but earnings and other labour costs have outpaced productivity.