UK Pay Growth Slowed In March

What’s going on:  

In March, the British labor market had a decrease in the rate of pay growth and the shortage of job applicants receded for the first time in two years, according to a survey of recruiters.  

The Recruitment and Employment Confederation/KPMG stated that the increases in starting salaries for permanent staff were the second-lowest in nearly two years, but remained considerable in comparison to the past.  

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In March, the number of available workers increased for the first time since February, spurred on in part by the increasing number of employees being laid off, according to Reuters.   

Why it matters:  

The Bank of England, which has increased interest rates 11 times since December 2021 to contain a spike in inflation, worries about the expenditure pressures in the labor market but has remarked that it anticipates pay growth to weaken. 

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How it’ll impact the future: 

Although it slowed last month, pay growth continues at a rapid rate, which likely attributable to inflationary pressures on wages as well as a dwindling supply of labor. 

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