U.K. Labor Market Continued to Improve but Omicron Fears Weaken Outlook

The U.K. labor market latest data released showed that it is continuing to improve in October right after the government ended the furlough scheme, giving a more steady the way for the Bank of England to raise the interest rates if it wants to.

According to figures released by the Office for National Statistics (ONS) on Tuesday, Employment rose by 149,000 in the three months through October, relative to the previous three months. That was less than the 228,000 expected. The number of those claiming jobless benefits fell by 49,800 in October alone, after a smaller decline of 14,900 in September.

The U.K. employment rate was up 0.2% on the previous quarter and just 1.1% shy of its rate before the Covid pandemic hit. Unemployment was estimated by the ONS at 4.2% of the workforce for the period, 0.4% lower than the previous quarter’s figures. Total hours worked in the economy were also up but remain below pre-coronavirus levels. U.K. employment figures have improved in tandem with the easing of Covid restrictions. But fears are rising that Boris Johnson’s government will reimpose steadily harsher restrictions to deal with the fresh wave of Covid-19 infections and potentially stall the economic recovery, Investing news reported.

The Rising inflation could led to speculation that the Bank of England will raise interest rates immidiately.

Chris Bailey, an analyst with Financial Orbit via Twitter said, “My instinct is still that the Bank of England will raise interest rates in early ’22, they should do it this week but undoubtedly will choose not to.”

©Photo: standard.co.uk