- Prior 4.8%
- Employment change -22k vs 0k expected
- Prior 91k
- Average weekly earnings +4.8% vs +5.0% 3m/y expected
- Prior +5.0%
- Average weekly earnings ex bonus +4.6% vs +4.6% 3m/y expected
- Prior +4.7%
- October payrolls change -32k
- Prior -10; revised to -32k
That's a soft report all around with October payrolls falling while the jobless rate runs up more than anticipated to the highest since March 2021. Even the wages data was a little softer at the balance and all of this put together might just prompt the BOE into taking action sooner rather than later. The only saving grace is that real earnings (vs CPI) is still on the softer side with total pay moving down from 0.9% to 0.7% in the three months to September in real terms.
With the drop in payrolls in October, total payrolled employees in the UK now stand at 30,273,000. That's the lowest since September 2023.
The odds of a rate cut in December were around 61% before this but should go up later once the rates market opens. GBP/USD has dropped from 1.3155 to 1.3125 currently on the release here.
Given the fact that the BOE hold last week was as a close one (5-4 vote), the softening in labour market conditions here should tip the scales for a December move. However, any further action next year will largely depend on the autumn budget as well.
