Why we anticipate the Bank of England's next interest rate reduction will occur in March

Shifts in the Job Market

Job vacancies have dropped significantly, outpacing declines seen in other advanced nations. Currently, there are just four open positions for every ten individuals seeking work—a ratio lower than before the pandemic. Layoffs seem to be on the rise, and, unusually, more businesses are shutting down than launching new ones. Despite some concerns about data accuracy, unemployment is trending upward.

Why This Is Important

• Wages are not increasing as quickly as before, and the slowdown is expected to continue. In the private sector, annual pay growth has dropped from 6% in January to 3.9% by October, with the possibility of reaching 3% soon—lower than pre-pandemic rates.
• These changes have direct implications for real disposable income and the broader economy.