London, United Kingdom. British employers showed signs of caution in March, with a measure of hiring falling and job postings at their lowest level in almost five years, according to data published this week.
Hiring and postings signal weaker demand
Figures covering March suggested a shift in sentiment among employers following the start of the Iran war, with hiring measures declining and job postings hitting a near five-year low.
Wage growth cools less than expected
Official data showed growth in average weekly earnings excluding bonuses slowed to 3.6% year-on-year in the three months to February, down from 3.8% in the three months to January, the Office for National Statistics said. Economists polled by Reuters had mostly expected a sharper slowdown to 3.5%.
Unemployment falls, but participation shifts
Britain’s unemployment rate fell unexpectedly in the three months to February, partly due to rising numbers of students not looking for work.
Bank of England watches wages amid inflation risks
The Bank of England has said it believes the jobs market is softening and is monitoring wages as it assesses inflation pressures, which investors view as vulnerable to higher energy prices linked to the Iran war. Some BoE officials see rising slack in the labour market as a factor that could help contain the risk of price pressures becoming more embedded.
Economist view
Sanjay Raja, chief UK economist at Deutsche Bank, said the latest data was unlikely to change the central bank’s view of labour market conditions, adding that the market “is not out of the woods yet.”
How do you think the latest labour market data could affect Bank of England policy decisions?