ONS latest | UK labour market recovery slows as budget looms

The UK’s labour market recovery is showing signs of a slowdown, with the latest figures from the Office for National Statistics (ONS) revealing a decrease in the unemployment rate to 4% for June to August 2024. Meanwhile, economic inactivity fell to 21.8%, driven by initiatives to bring more people into the workforce. However, the annual growth in regular pay (excluding bonuses) has dipped slightly to 4.9%, down from 5.1% for the previous three-month period.

Jeanette Wheeler, Chief HR Officer at MHR, described the latest report as showing that “the handbrake is slowly coming off the labour market” but highlighted that declining wage growth and vacancies, which are down by 14.4% year-over-year, could suggest a cooling trend. "With the Budget around the corner,” Wheeler stated, “we can expect the way employers and employees approach the job market to shift once more, and there is hope the Budget will provide certainty for employers to invest in and boost recruitment.” She underscored the need for businesses to monitor their recruitment and retention closely, especially as potential legislative changes loom.