The number of payrolled employees rose another 160k in the UK during October to a record 29.294 million. Demand for labour is surging. The number of job vacancies in the three months to October rose to a new record of 1.172 million, up 388k.
Ever since the Brexit referendum, the temptation has been to write off the UK’s economic prospects. But the labour market numbers continue to prove sceptics wrong.
If there is a bear case for sterling, it lies in the UK’s weak business investment, which remains well down on pre-pandemic levels.
In any case, this morning’s CPI report will cement a rate hike for December. Core inflation (ex-food, energy, alcohol & tobacco) beat expectations, accelerating from 2.90% to 3.38%. The headline rate hit 4.21%, the highest since November 2011. The energy CPI jumped 22.3% y/y.
Median monthly pay increased 4.9% y/y in October, according to PAYE data. The y/y rate is slowing back to pre-pandemic rates. The acceleration in inflation means that real wage growth could turn negative in the coming months.
