What to expect in the next UK jobs report?

The UK ILO Unemployment Rate is seen steady at 3.8% in the three months through May while the economy is seen adding 150K jobs in the reported period, down from a 250K jobs growth seen previously.

The UK Average Weekly Earnings (excluding bonuses) are expected to increase 7.1% YoY through May, at a slightly slower pace than  April’s 7.2% 3Mo/YoY rise. However, Average Earnings, including bonuses, are seen rising 6.8% in the reported period, up from a 6.5% growth reported through April, hitting the highest level since August 2021. 

On Monday, a survey conducted by the Recruitment and Employment Confederation (REC) and accountants KPMG showed that increases in starting salaries for permanent and temporary staff were the weakest since April 2021, alleviating some of the BoE’s concerns about inflation pressure.

“The final labor market data before the August BoE decision should indicate whether domestic price pressures are becoming more persistent. Our expectation is for a slight loosening in the labor market and a marginal easing in regular pay, which should allow the Bank to downshift to 25bp,” analysts at Societe Generale noted.