Cooling UK labour market ‘questions need’ for Bank of England rate hikes; grocery inflation slows to two-year low – business live

Brent crude climbs above $91 a barrel Sanjay Raja , chief UK economist at Deutsche Bank, noted that job vacancies – the best proxy for jobs demand – slowed.

The vacancy to unemployment ratio has also been stable for a few months now at 0.4.

Second, the number of redundancies slowed to 106,000, its lowest level since July 2025.

Third, the claimant count jobless rate (which measure the number of people out of work who are applying for jobless benefits) also dropped from 4.4% to 4.3%.

Fourth, labour market flows point to some momentum in activity too.

The underemployment rate dropped from 8.6% in the first quarter to 8% in the second quarter.

Put simply, while the labour market may seem stagnant on the surface, there are some signs of stabilisation on the horizon.

For the Bank of England’s monetary policy committee, today’s data won’t do much to move the dial.

Weakness in headline indicators should keep the MPC stuck on the sidelines for now as markets turn their focus to tomorrow’s inflation data.

Bank of England policymakers will be “reassured” that private sector wage growth slowed down to 2.8%.

This, however, might only prove short-lived.

The problem is that public sector wage growth continues to outpace strongly wage developments in the private sector.

Indeed, annual average regular earnings growth was 6.1 per cent for the public sector (ONS notes that public sector annual pay growth continues to be affected by variations in the timing of pay awards this year).

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