Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Unemployment across the UK has dipped, as company payrolls continued to swell over the summer as the economy recovered from the economic shock of the pandemic.
Figures released by the Office for National Statistics this morning show that the jobless rate fell to 4.5% in the three months to August. That’s down from 4.6% in the three months to July, and 0.4 percentage points lower than the previous quarter.
In another sign that the labour market continuing to recover, the number of payroll employees rose by 207,000 in September to a record 29.2m, back at pre-pandemic levels.
Firms are also struggling to fill jobs, the survey confirms. Job vacancies in July to September 2021 hit a record high of 1,102,000 – an increase of 318,000 from its pre-pandemic January to March 2020 level.
But the surge in pay growth seen earlier this year (and hailed by Boris Johnson) has slowed.
Total pay, including bonuses, rose by 7.2% in the June-August quarter, down from 8.3% in May-July. Regular pay rose by 6.0% in the quarter, down from 6.8%
And adjusted for inflation, that leaves real total pay at 4.7% and real regular pay at 3.4%.
But, the ONS points out that this data should be treated cautiously, as the loss of more low-paid jobs in the pandemic has pushed up average earnings.
Annual growth in average employee pay is being affected by temporary factors that have inflated the increase in the headline growth rate: base effects where the latest months are now compared with low base periods when earnings were first affected by the pandemic, and compositional effects where there has been a fall in the number and proportion of lower-paid employee jobs, therefore increasing average earnings.
Overall, the ONS estimates that underlying regular earnings growth rate is between 4.1% and 5.6% — but again, given the uncertainty around this range, interpretation should be treated with caution.
ONS Director of Economic Statistics Darren Morgan says the jobs market continues to recover:
More details and reaction to follow…
Stock markets are expected to open lower, as fears about weakening growth, the global energy crunch, higher prices and the possibility of interest rate hikes keep investors on edge.
Yesterday, the odds of a UK interest rate rise before the end of 2021 increased, as rising fuel and food prices push up inflation.
And the International Monetary Fund is holding its annual meetings in Washington, where its expected to issue a downbeat economic outlook, as supply-chain bottlenecks and rising inflationary pressures threaten the recovery.
- 7am: UK labour force survey
- 10am BST: ZEW survey of German investor confidence
- 11am BST: NFIB index of US Small Business Optimism
- 2pm: IMF publishes its World Economic Outlook
- 3pm BST: JOLTS survey of US job vacancies
- 3.30pm BST: IMF publishes its Global Financial Stability Report