LONDON, Jan 20 (Reuters) – Britain’s jobs market weakened in the run-up to November’s budget announcement by finance minister Rachel Reeves, according to official data published on Tuesday which showed a drop in employment and a cooling of wage growth.
A measure of payrolls data from the tax office showed a drop of 43,000 in December from November, the biggest monthly fall since November 2020 although there have been bigger preliminary estimates of falls in that period which were subsequently revised up, an ONS official said.
A fall of 38,000 first reported for November was revised to show a decline of 33,000 people in payrolled employment.
Annual pay growth in the private sector excluding bonuses – which is being closely watched by the Bank of England – slowed to 3.6% in the three months to November, its slowest rise since the November 2020, from 3.9% in the three months to October.
Overall core pay growth slowed to 4.5% in the September-to-November period compared with a year earlier, slightly below the 4.6% growth in the three months to October and in line with economist expectations in a Reuters poll.
The jobless rate held at 5.1%, as expected.
“The number of employees on payroll has fallen again, with reductions over the last year concentrated in retail and hospitality, and reflecting ongoing weak hiring activity,” ONS Director of Economic Statistics Liz McKeown said.
The Bank of England is watching pay as a gauge of how long Britain’s still high rate of inflation is likely to last.
Financial markets on Monday showed that at least one 0.25 percentage-point interest rate cut was fully priced in for 2026, with a roughly two-thirds chance of two cuts.
Data published last week showed stronger-than-expected growth in the economy in November after months of caution among businesses before finance minister Rachel Reeves’ budget at the end of that month.
(Reporting by Suban AbdullaEditing by William Schomberg)
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