London bucks stutter in UK jobs market

The number of people employed in the UK took an unexpected dip in the three months to August, according to official figures released on Tuesday.

Workers and other Londoners walking over London Bridge
While economists had been expecting another rise in the number in work, data from the Office for National Statistics (ONS) showed the employment total had fallen by 56,000 to 32.69 million.Meanwhile, in August, the number out of work rose from the 45-year low reported in July, increasing by 22,00 to 1.31 million.

Morgan McKinley UK: Autumn London Employment Monitor

Coinciding with publication of the ONS data was the Autumn London Employment Monitor, compiled by global recruiters Morgan McKinley, which showed that, after a rollercoaster first half of the year, employment in the capital increased by 12% in Q3 compared to the previous quarter.Hakan Enver, managing director of Morgan McKinley UK, commented, “Pressure remains strong on both businesses and individual job-seekers to hunker down and wait for a resolution on Brexit."The fact that job-seekers are being given added time to get their residency in order, hard Brexit or not, is helping offset some anxiety. But fear of the unknown is rampant and we’re continuing to see employees cling to existing positions."The report pointed out that the capital's fintech scene remained particularly resilient, with London overtaking New York to become the world’s second most popular city for fintech investment after San Francisco.“The silver lining is that larger banks are continuing to keep up their technology investments, making it among the most active and lucrative sub-sectors in the financial services industry," said Mr Enver."It is proving a source of relative stability at a time when the industry is struggling to keep up with daily changes in a complex and contentious global market, as well as facing the looming limitations on its ability to do business with the EU.”

ONS: UK earnings growth has fallen

Across the UK as a whole, the ONS reported the number of vacancies in August had fallen to 813,00 while earnings growth had fallen to 3.8% from 4% in July.Matt Hughes, deputy head of labour market statistics at the ONS, said, "The employment rate is rising year on year, but this growth has cooled noticeably in recent months. Among the under-25s, the employment rate has actually started to fall on the year."Pay growth continues to outstrip inflation, as it has done for over 18 months now."

Capital Economics: weak UK economic growth is restraining labour market

Thomas Pugh, UK economist at Capital Economics, commented, "This is further evidence that the underlying weakness in economic growth is restraining labour market activity."However, it could also be evidence that the uncertainty around Brexit is starting to impact firms' hiring decisions. The survey evidence is consistent with a further softening in employment and wage growth going forward, too."

PwC: UK unemployment rate remains low by historical standards

Jing Teow, economist at PwC, added, "The UK jobs market remains fairly resilient. The number of people employed continues to increase compared to last year, largely driven by the increase in women in work."And while unemployment has increased slightly over the last quarter, at 3.9%, the unemployment rate remains low by historical standards."

For more news and views, visit our dedicated UK section.

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