UK unemployment rate falls again and wage growth slows – what it means for your money --[Reported by Umva mag]

UNEMPLOYMENT has fallen again and wage growth has slowed, new data from the ONS shows.

The rate of unemployment fell to 4% in the three months to August 2024, which is below estimates of a year ago.

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Meanwhile, the estimated number of job vacancies in the UK decreased in July to September 2024, by 34,000 in the quarter to 841,000. 

The decrease marks the 27th month in a row that vaccines declined but the figure is still above pre-pandemic levels.

The ONS also said average regular earnings growth eased back to 4.9% in the three months to July, down from 5.1% in the previous three months.

This marked the lowest level since the three months to June 2022.

But earnings growth has continued to outstrip inflation, as pay increased by 2.6% in the three months to August with Consumer Prices Index inflation taken into account.

David Freeman, head of the ONS labour market and household division, said: “Pay growth slowed again, with last year’s one-off payments made to many public sector workers continuing to affect the figures for total pay.

“However, earnings continue to rise faster than inflation.”

“Vacancies have fallen once more, with most industries seeing a fall on the quarter,” he added.

It comes amid a challenging time for Brits as political and economic unrest has hurt people’s pockets.

The ONS will publish its latest figures for inflation, with economists predicting the figure to fall to 2%.

Last month the figure, which helps measure the cost of living, was held 2.2% after rising to the same figure the month before.

While cooling inflation is often seen as a good sign, consumer confidence has taken a nose dive in recent weeks.

Many Brits are not feeling hopeful for the winter as they gear up for what is predicted to be a painful budget for their wallet.

What it means for your money

Alice Hayne, personal finance analyst at Bestinvest by Evelyn Partners, the wealth manager, said Budget speculation may be “creating anxiety” for consumers.

However, she said that there may still be some hope if the Bank of England pushes ahead with its second interest rate cut in November,

This could lead to lower interest rates on costly loans such as a mortgage.

She explained: “A cooling jobs market, slowing pay growth and inflation expected to dip below 2% on Wednesday, certainly raise the chances of further monetary policy loosening when central bank policymakers next meet in November.”.

Meanwhile, Alice said keeping personal finances on track will remain “key” for households in the run up to the more expensive festive season.

She added: “Building a robust emergency fund to cover any periods without earned income, paying down expensive debts and even taking out an income protection policy are all ways to ease financial fears for households with no back-up funds worried about how they would cope should the worst happen, and the main breadwinner loses their job.”   

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