span>span>Tuesday 15th August 2023/span>span> - 09:37 (BST)/span>/span>
Figures released by the National Statistic office have indicated UK unemployment increased slightly to 4.2% in the three months to June – the highest levels since late 2021 and above market forecasts of 4%.
The increase was primarily driven by people unemployed for up to 6 months. There was a large net movement from economic inactivity into unemployment, with the economic inactivity rate falling by 0.1% on the quarter to 20.9% - largely driven by those inactive because they are looking after family or home while those inactive because of long-term sickness increased to a record high.
Meanwhile, the employment rate fell 0.1% to 75.7% - driven by full-time employees and self-employed workers. The estimate of pay-rolled employees for July shows a monthly increase of 97K to 30.2 million. In May to July 2023, the estimated number of vacancies fell by 66K.
Conversely, average wages excluding bonus in the UK increased 7.8% year-on-year to £613 per week in Q2 2023 - the most on record and way above forecasts of 7.4%. The biggest increases were seen in finance and business services (9.4%) and the private sector (8.2%) while wages in the public sector rose 6.2%. Considering June only, regular pay went up 7.9%.
GBP immediately moved higher following the news which helps support the case for the BoE to tighten further during their next meeting in September. Traders now await the UK inflation report due Wednesday for further clarification on the economic price pressures, with forecasts pointing to a fall in the headline inflation to 6.9% from 7.8% and the core rate to edge lower to 6.8% from 6.9%.
