London - UK employment fell for the first time in more than a year in the three months through October as the labour market showed some signs of weakness.
The number of
people in work fell by 6 000 to 31.76 million people, the Office for National
Statistics said on Wednesday. While the decline was small, and the jobless rate
was unchanged at 4.8 percent, the statistics office said the labour market
“appears to have flattened off in recent months.”
“This is the
first genuine disappointment we have seen in the hard data since the Brexit
vote,” said Alan Clarke, an economist at Scotiabank in London. “This has been a
gradual deterioration” and “is bad news for spending growth next year.”
Single-month
data showed that the unemployment rate rose to 4.9 percent in October from 4.6
percent in September. Unemployment fell over the three-month period, by 16 000
to 1.62 million, as the drop in the number of people in work was more than
offset by those leaving the labour force. There was a 22 000 decline in the
economically active population during the period.
In a worrying
sign, full-time employment dropped by 51 000 between August and October.
Jobless claims, a narrower measure of unemployment, rose for a fourth month in
November. The pound was little changed against the dollar after the data were
released and was at $1.2661 as of 9:56 a.m. London time.
The figures come
a day before the Bank of England announces its latest policy decision, when
it’s forecast to keep its key interest rate at a record-low 0.25 percent. After
cutting the rate in August, policy makers have since warned of inflation risks
because of the pound’s drop since the UK voted in June to leave the European
Union.
“If job
opportunities are deteriorating, we see further downside risk for confidence
and activity in general,” said James Knightley, an economist at ING Bank in
London. “While the BOE are officially neutral on the outlook for monetary
policy, we still think a rate cut is more likely than a hike next year.”
For consumers
facing the prospect of accelerating inflation - and a potential squeeze on
their incomes - the latest labour report had some good news. Regular pay growth
accelerated to 2.6 percent, the fastest since August 2015, leaving real wage
growth at 1.7 percent for a fourth month. Still, with price growth set to
quicken rapidly early next year, increases in real incomes could be eroded.
- With assistance from Mark Evans and Scott
Hamilton.