LONDON (Reuters) – Britain’s labour market showed signs of weakening in data published on Tuesday that suggested a hit to hiring in the run-up to this month’s increase in a tax on employers, but wage growth remained strong.
The number of vacancies fell below their pre-COVID pandemic level for the first time since the three months to May 2021 in the three months to March.
Provisional data given by employers to the tax authorities showed the number of employees fell by 78,000 in March and February’s figure was revised to show a drop of 8,000 compared with a previous estimate of a 21,000 gain.
While some of the figures published by the Office for National Statistics showed a weakening in hiring, pay growth was still fast, posing a conundrum for the Bank of England.
The BoE is trying to gauge whether inflation pressures in the labour market are easing sufficiently for it to continue cutting interest rates. It is also watching for the economic impact of U.S. President Donald Trump’s trade tariffs.
Average weekly earnings, excluding bonuses, rose by 5.9% in the three months to February compared with the same period a year earlier, faster than a revised 5.8% increase in the three months to January.
Private-sector pay excluding bonuses – a gauge of domestic inflation pressure watched closely by the BoE – rose by 5.9%, compared with the same period a year earlier, unchanged from the pace in the three months to January.
A Reuters poll of economists had pointed to growth of 6.0% in both measures of basic pay.
(Writing by William Schomberg; Editing by Suban Abdulla and Kate Holton)
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