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UK job vacancies fall, wage growth slows in Brexit-hit labour market
THE UK labour market and manufacturing sector displayed further signs of nervousness around the now-postponed Oct 31 deadline to leave the European Union and in the run-up to last week's general election.
Vacancies fell below 800,000 for the first time in two years and wages grew at their slowest annual pace since 2018, the Office for National Statistics said on Tuesday. Employment rose marginally, leaving the jobless rate unchanged.
A separate survey showed factory output plunged the most since the financial crisis in the fourth quarter.
With a victorious Boris Johnson promising to deliver Brexit by the new deadline of Jan 31, the hope is that the confusion that has hung over the economy - and spread to the once resilient labour market - will now begin to dissipate.
The uncertainty is far from over, however, as Britain and the EU face the task of striking a trade deal in just 11 months.
The prime minister is set to raise the stakes by making it illegal to extend the proposed transition period, meaning the UK would crash out of the EU at the end of next year unless an agreement is reached.
Concern about Mr Johnson's latest move hit the pound on Tuesday, ending its post-election rally. It fell one per cent to US$1.3198 as at 10.55 am London time. The FTSE 250 index of stocks dropped 1.2 per cent.
The manufacturing report from the Confederation of British Industry also showed weakness in demand at factories. The measures for total orders and export orders both declined in December.
The number of people in work rose 24,000 between August and October, with people working for themselves accounting for all of the increase.
Employee numbers fell, suggesting weak demand for labour among firms. Unemployment fell 13,000, and the jobless rate stayed at 3.8 per cent, matching the lowest since the mid 1970s.
The participation rate was unchanged over the quarter. Female unemployment fell to a record low. Vacancies declined by 20,000 in the three months through November to 794,000, the lowest level since 2017.
Average earnings excluding bonuses slowed to an annual 3.5 per cent in the period through October from 3.6 per cent. Total pay growth slowed to 3.2 per cent, the least since 2018.
The sharp decline from 3.7 per cent in September - the biggest drop since 2015 - reflected strong bonus payment a year earlier.
"The jobs market held up better than we expected in the three months to October. The one chink in the armour was a fall in the number of vacancies, although we expect that trend to reverse going into 2020," Bloomberg Economic's Dan Hanson said. BLOOMBERG