No Result
View All Result
  • About us
  • Contact us
  • Privacy Policy
  • Terms & Conditions
Smart Investment Today
  • News
  • Economy
  • Editor’s Pick
  • Investing
  • Stock
  • News
  • Economy
  • Editor’s Pick
  • Investing
  • Stock
No Result
View All Result
Smart Investment Today
No Result
View All Result
Home Investing

UK salary growth slows, paving the way for potential interest rate cuts

by
August 8, 2024
in Investing
0
UK salary growth slows, paving the way for potential interest rate cuts
0
SHARES
5
VIEWS
Share on FacebookShare on Twitter

Wage growth in the UK slowed last month while demand for workers remained steady, potentially setting the stage for further interest rate cuts by the Bank of England.

Research from KPMG and the Recruitment and Employment Confederation (REC) reveals that the growth rate of salaries for both permanent and part-time staff decreased in July. The permanent staff salary index dropped to 56.5 from 57.1 in June, remaining above the 50-point mark that signifies growth. The temporary salary index also declined, falling to 50.9 from 53.7.

These figures, closely monitored by the Bank of England due to concerns about the accuracy of official labour market estimates, indicate that wage growth is easing from record highs. This trend is partly attributed to the impact of stringent monetary policy on economic demand. Over the past two years, robust salary growth has helped mitigate the effects of the cost of living crisis on workers’ real incomes.

Hiring also contracted in July, with the KPMG and REC permanent placement index reading at 47.7, suggesting businesses hired fewer full-time staff. However, the slowdown in recruitment was less severe than the previous month. The vacancy index rose slightly to 49.1 from 48.6, while the temporary hiring index dropped to 49.8 from 50.3.

Kate Shoesmith, deputy chief executive of the REC, commented: “The weaker growth in both salaries and temporary pay suggests that employers are aligning pay with inflation as desired by the Bank of England. The interest rate cut is a welcome measure, and employers will need continued support to maintain confidence.”

This month, the Bank of England cut the base rate by 0.25 percentage points to 5 per cent. The monetary policy committee stated it is now considering the overall economic data rather than focusing on specific indicators. Financial markets anticipate two more quarter-point cuts this year.

The central bank has expressed concerns about the challenges in assessing labour market trends due to declining data quality from the Office for National Statistics (ONS). Low response rates to the ONS labour force survey have raised doubts about its reliability. Consequently, the bank is now relying on alternative research, including the KPMG and REC jobs report.

Analysts predict the UK economy will gain momentum later this year, potentially leading companies to ramp up recruitment to meet increased demand. The Bank of England recently revised its GDP growth forecast for 2024 upwards to 1.25 per cent from 0.5 per cent.

In its annual revisions, the ONS upgraded its estimates of the UK’s post-Covid economic recovery. The economy expanded by 4.8 per cent in 2022, up from an initial estimate of 4.3 per cent. The GDP contraction in 2020 was revised to 10.3 per cent, less severe than previously thought.

By the end of 2022, the economy was 2.1 per cent larger than its pre-Covid size, an improvement on the ONS’s earlier estimate of 1.9 per cent. The UK’s recovery was initially considered the slowest among the G7, but revised data shows it was around the group’s average.

Jon Holt, chief executive and senior partner of KPMG in the UK, remarked, “With forecasts for economic growth improving and potential further interest rate cuts in the coming months, there are green shoots of economic recovery.” He added that some businesses might delay hiring until after Chancellor Rachel Reeves presents her first budget on October 30, seeking more clarity on fiscal policy. The chancellor has indicated that tax increases are on the horizon.

Read more:
UK salary growth slows, paving the way for potential interest rate cuts

Previous Post

Secrets of Success: Insights from Camilla Hadcock, Director of Roach Bridge Tissues

Next Post

How Scott Dylan is Bridging Gaps in the UK Venture Capital Ecosystem

Next Post

How Scott Dylan is Bridging Gaps in the UK Venture Capital Ecosystem

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    • Trending
    • Comments
    • Latest

    Gold Prices Rise as the Dollar Slowly Dies

    May 25, 2024

    Richard Murphy, The Bank of England, And MMT Confusion

    March 15, 2025

    We Can’t Fix International Organizations like the WTO. Abolish Them.

    March 15, 2025

    Free Markets Promote Peaceful Cooperation and Racial Harmony

    March 15, 2025
    British manufacturers turn their backs on US as export market amid Trump-era trade turmoil

    British manufacturers turn their backs on US as export market amid Trump-era trade turmoil

    0

    Ana-Maria Coaching Marks Milestone with New Book Release

    0

    The Consequences of California’s New Minimum Wage Law

    0

    Memorial Day

    0
    British manufacturers turn their backs on US as export market amid Trump-era trade turmoil

    British manufacturers turn their backs on US as export market amid Trump-era trade turmoil

    June 16, 2025

    “Brite Box Project by Voices of Hope to be Featured at House of Lords Presentation on June 18, 2025”

    June 16, 2025

    “April Banbury Joins Off the Hanger: Where Bridal Fashion and Reality TV Collide”

    June 16, 2025

    “Experience the Future of Mining with AI Cloud Technology: Earn Up to $27,000 Daily in Passive Income with Area Mining”

    June 16, 2025

    Recent News

    British manufacturers turn their backs on US as export market amid Trump-era trade turmoil

    British manufacturers turn their backs on US as export market amid Trump-era trade turmoil

    June 16, 2025

    “Brite Box Project by Voices of Hope to be Featured at House of Lords Presentation on June 18, 2025”

    June 16, 2025

    “April Banbury Joins Off the Hanger: Where Bridal Fashion and Reality TV Collide”

    June 16, 2025

    “Experience the Future of Mining with AI Cloud Technology: Earn Up to $27,000 Daily in Passive Income with Area Mining”

    June 16, 2025
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Copyright © 2025 smartinvestmenttoday.com | All Rights Reserved

    No Result
    View All Result
    • News
    • Economy
    • Editor’s Pick
    • Investing
    • Stock

    Copyright © 2025 smartinvestmenttoday.com | All Rights Reserved