Bloomberg
The UK labour market and manufacturing sector displayed further signs of nervousness around the now-postponed October 31 deadline to leave the European Union and in the run-up to last week’s general election.
Vacancies fell below 800,000 for the first time in two years and wages grew at their slowest annual pace since 2018, the Office for National Statistics said. Employment rose marginally, leaving the jobless rate unchanged. A separate survey showed factory output plunged the most since the financial crisis in the fourth quarter.
With a victorious Boris Johnson promising to deliver Brexit by the new deadline of January 31, the hope is that the confusion that has hung over the economy — and spread to the once resilient labour market — will now begin to dissipate.
The uncertainty is far from over, however, as Britain and the EU face the task of striking a trade deal in just 11 months. The prime minister is set to raise the stakes by making it illegal to extend the proposed transition period, meaning the UK will crash out of the EU at the end of next year unless an agreement is reached.
Concern about Johnson’s latest move hit the pound on Tuesday, ending its post-election rally. The FTSE 250 index of stocks dropped 1.2%.
The manufacturing report from the Confederation of British Industry also showed weakness in demand at factories. The measures for total orders and export orders both declined in December.
The number of people in work rose 24,000 between August and October, taking the employment rate to a record 76.2%. But all of the increase came from people working for themselves. Employee numbers fell, suggesting weak demand for labour among firms.