The figures provide “some tentative evidence that businesses started to respond to rises in business taxes and the minimum wage from this month by reducing headcount”, said Ashley Webb of Capital Economics. “Jobs growth could be hit further from the recent increase in uncertainty due to the chaotic way US tariff policy is being set.”
Webb noted that while employment continued to cool, “it hasn’t collapsed as the dire warnings from some business surveys suggested”. Despite softening in the jobs market, “there were few signs of this feeding through to slower wage growth”, he added.
Webb said downward pressure on inflation and activity from higher US tariffs “may mean the Bank of England starts to become less worried about the upside risks to inflation from pay growth and more worried about the downside risks to activity”.