Deutsche Bank’s Sanjay Raja expects the United Kingdom (UK) labour market to remain weak after a surprise drop in the jobless rate driven by self-employment. Raja forecasts the unemployment rate to hold at 4.9%, with elevated redundancies, softer employment intentions following the Iran conflict, and only a small decline in vacancies, pointing to a sluggish overall jobs picture.

Jobs data seen staying under pressure

"After a shock drop in the jobless rate — owing to a historic rise in self-employment — we expect things to continue as they were before: on a weaker footing."

"Indeed, the Iran energy shock has likely resulted in stalled hiring plans, with firms continuing to adjust pay growth in response."

"On the quantities side of the labour market, we expect the jobless rate to stay put at 4.9%."

"Our models continue to point to elevated redundancies – as measured by the LFS (with gross redundancies tracking between 110k and 155k)."

"Survey data too remain weak, with employment intentions falling back on news of the Iran conflict."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)