UK Jobs Data Suggests Interest Rates Will Hold

The latest UK jobs data shows a softer labour market and cooling pay pressures, reducing the likelihood of another inflation upswing. Private sector wage growth has stabilized around 2.9% to 3.3%, which matches the Bank of England's assessment of what is consistent with its 2% inflation target.

The data suggests that the jobs market is much cooler than it was during the Ukraine shock four years ago, lowering the risk of second-round inflation effects.

With private sector wage growth stabilizing and the UK unemployment rate ticking up to 4.2%, the pressure on the Bank of England to adjust interest rates is fading.