- UK jobs market is slowing, official figures show
- Tax data shows 33,000 fewer people employed in April
- Vacancies fall by most in more than a year
- Wage growth slows by more than expected
LONDON, May 13 (Reuters) - Britain's jobs market cooled again last month, according to data that showed the impact of a tax hike on employers and Donald Trump's trade tariffs but is likely to give some reassurance to the Bank of England that inflation pressures are waning.
Provisional tax office figures published on Tuesday showed the number of employees fell by almost 33,000 in April after a 47,000 drop in March.
Vacancies dipped further below their pre-COVID pandemic level, sliding by 42,000 - the biggest decline in more than a year - in the three months to April to 761,000.
Average weekly earnings, excluding bonuses, rose by 5.6% from January to March compared with the same period last year, the slowest increase since the three months to November last year, the Office for National Statistics said.
A Reuters poll of economists had pointed to regular wage growth of 5.7%.
Sterling and bets in financial markets on the pace of BoE rate cuts over the remainder of this year were little changed after the data was published.
"While the labour market continues to slow, and there is some evidence of the impact of the increase in national insurance ... there is nothing to suggest it immediately fell off a cliff in response to the shock," Luke Bartholomew, deputy chief economist at fund management firm Aberdeen, said.
"Combined with the better trade news recently, there is nothing here to make the Bank of England regret its decision to say the easing cycle will continue to be only 'gradual'," Bartholomew said.
PAY PRESSURES EASING BUT STILL STRONG
The BoE is monitoring the inflation pressures in Britain's labour market closely as it considers whether to speed up its pace of interest rate cuts to shield the economy from the fallout from Trump's policies.
Last week, the central bank's Monetary Policy Committee split three ways on its May interest rate decision with five members backing a quarter-point cut, two favouring a bigger half-point reduction and two voting to keep rates on hold.
On Monday, interest rate-setters Clare Lombardelli and Megan Greene pointed to inflation risks in the labour market where pay growth remains too high for the BoE's 2% target. A third MPC member, Alan Taylor, said the "quite perilous" trade situation was one reason for his vote for a half-point cut.
The ONS said private-sector pay excluding bonuses - a gauge of domestic inflation pressure tracked by the BoE - rose by 5.6%, weaker than a 5.9% increase in the three months to February.
Jack Kennedy, senior economist at global jobsite Indeed, said the BoE was likely to remain on guard about the risks posed by still high wage growth in Britain.
"A more material and sustained cooling of wage pressures would open the door to faster interest rate cuts, but the MPC's split vote in May underlines the continued caution over persistent inflation pressures," Kennedy said.
The ONS said Britain's unemployment rate, which is based on a survey that is being overhauled and is no longer considered an accurate gauge of the jobs market, rose to 4.5% from 4.4%, in line with the Reuters poll and the highest since mid-2021.
The ONS said it had seen an improvement in response rates to its Labour Force Survey but cautioned there was still some volatility in the quality of detailed estimates.
The agency is aiming to transition its labour market statistics to a new approach in November next year, but it has warned the change could be delayed to 2027.
Writing by William Schomberg; editing by Sarah Young, Andrew Heavens and Hugh Lawson
Source: Reuters