The UK's labor market is experiencing a pronounced decline, with payroll employment decreasing by over 109,000 in May, marking the steepest fall since May 2020. Rising costs, particularly a £25 billion hike in national insurance contributions, have contributed significantly to job losses totaling 276,000 since October. Wage growth has also cooled, dipping below analysts' expectations, indicating easing wage pressures and reduced workers' bargaining power. The unemployment rate rose to 4.6%, with businesses exhibiting hesitancy in hiring or replacing staff, highlighting a broader slowdown in the economy.
This will limit workers' bargaining power, as wage pressures are likely to ease further this year.
There continues to be weakening in the labour market, with firms holding back from recruiting.
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