Volatile UK Labour Market Data Continues to Point to Plenty of Slack

UK labour market data for April shows a cooling trend with a 100k drop in payrolls and unemployment rising to 5.0%. MUFG maintains its forecast for 50bp of tightening this year but suggests the Bank of England will likely wait until July for the first move.

Key Takeaways

• 1.UK payroll employment showed a sharp drop of 100k in April, the largest since May 2020, though figures are highly prone to upward revision.
• 2.Broader indicators confirm a cooling labour market, with unemployment rising to 5.0% and vacancies falling 7.1% year-on-year.
• 3.Private sector pay growth has eased to 3.0%, coming in slightly below consensus and previous BoE estimates.

Table of Contents

• Don't take payrolls at face value – but the cooling labour market trend remains
• Dovish jobs data but focus will remain on inflation risks
• UK payroll employment plunged – but watch for revisions
• Clear labour market slack and cooling pay growth
• Disclaimer

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