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The UK labor market showed signs of weakening in February and March even after the salary increase remained strong, underlining the challenge facing the Bank of England as the economy provides for the impact of US tariffs.
Paid employment fell by 8,000 between January and February according to tax data published on Tuesday. Preliminary figures for March showed a greater decrease of 78,000, or 0.3 percent of those in paid employment, prior to the presentation this month of the national insurance contributions of the highest employers set out in the October budget.
The vacancies fell below the pre-fandemic level for the first time since the spring of 2021.
Data separated by the Office for National Statistics showed annual increase in average weekly profits, excluding awards, were 5.9 percent to three months to February, from 5.8 percent to three months to January. Economists had predicted an increase of 6 percent.
The Bank of England is looking closely at employment data as the latest business surveys signaled a sharp drop in employment after the budget. The national salary of living also increased this month.
The figures come amid high uncertainty for UK businesses following US President Donald Trump’s decision on April 2 to impose import fees on most countries.
UK exports now face a 10 per cent fee of imports in the US, adjacent economic perspective. Financial markets are prices at a reduction in the Bank of England in May, with expectations of two further reductions by the end of the year.
LIZ McKeown of IBS said the salary increase was accelerated in the public sector “while previous wages are fully increased in our title figures, while the private sector fee was slightly changed.”
