Job vacancies and starting salaries 'fall for first time this year'
By David Wood | 21st August 2023
The labour market is starting to lose some of its inflationary heat, according to one report.
The shift could give the Bank of England reason to pause its cycle of interest rate hikes.
Data from a jobs search website has suggested vacancies and advertised starting salaries both fell in July - the first monthly decline for both elements this year, reports Sky News.
Adzuna's latest report gives some evidence the Bank's action against inflation is working.
Policymakers are particularly concerned about wage growth becoming a driving force of inflation.
They fear wage rises to keep up with the pace of price growth will only increase demand in the economy and provide upwards pressure on inflation.
Official statistics published last week showed basic wages rose at the fastest pace since at least 2001 in the three months to June.
That stat also reflects the effects of the tight labour market that has seen employers forced to offer glittering sums to retain and attract talent.
The Bank has acted against inflation through 14 consecutive interest rate rises.
The most recent hike earlier this month saw Bank rate hit 5.25%, piling further misery on borrowers.
Financial markets currently see the rate peaking at around 6% early next year despite the headline rate of inflation easing sharply to 6.8% in July.
Adzuna's survey is a possible sign the Bank's tightening is having the desired effect, said Sky News.
It also suggested employers were turning more cautious about hiring.
Vacancies dropped by 1.11% to 1,047,000 while average salaries were down 0.15% at £37,750 compared to June, both reflecting the tougher economy that is also pushing up the jobless rate.
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