In December, UK jobless claims rose less than expected and also the previous month’s outcome was downwardly revised. Jobless claims rose by 1 200 in December to a total level of 1.597 million, while the consensus was looking for an increase by 7 000. The claimant count rate stayed unchanged at 5.0%, in line with expectations. The ILO unemployment rate, which is reported with an extra month lag, rose from 8.3% to 8.4% in November, while a stable outcome was expected. While the claims data surprised on the downside of expectations, the ILO unemployment rate rose to the highest level since November 1995, which is more worrying and could be the more realistic figure.
Earnings growth slowed further in November, easing from an upwardly revised 2.1% Y/Y to 1.9% Y/Y. Together with an inflation rate of 4.2% Y/Y, this indicates that households’ budgets are under pressure, which will continue to weigh on spending.