J.P. Morgan: The UK labour market is improving rapidly

J.P. Morgan: The UK labour market is improving rapidly

23 augustus 2021

Verenigd Koninkrijk
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Recent UK economic data point to a surge in economic activity and hiring. The three- month unemployment rate fell to 4.7% in June, with the single month rate falling to 4.4% – a level the Bank of England hadn’t expected to be reached until the third quarter of 2022.

With job vacancies at record highs, employment growth in the coming months should remain strong and help absorb some of those currently furloughed back into employment as the scheme expires at the end of September. The rapid improvement in the labour market opens up the possibility of more hawkish communication from the Bank of England and an interest rate hike in the first half of next year, which should be supportive of sterling in the coming months.

%, three-month unemployment rate (LHS); thousands (RHS)

2308 J.P. Morgan

Source: ONS, Refinitiv Datastream, J.P. Morgan Asset Management. Data as of 20 August 2021.

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