UK employers cut jobs ahead of April’s legislative changes

The British labor market has shown signs of weakening ahead of regulatory changes set to take effect in April, with continued wage growth complicating the outlook for the Bank of England.

According to the UK’s Office for National Statistics, job vacancies have fallen below pre-pandemic levels. Meanwhile, preliminary employer data indicates a drop of 78,000 employees in March, the largest decline since the beginning of the pandemic in 2020.

Deutsche Bank’s chief UK economist, Sanjay Raja, highlights the prevailing impact of negative labor market trends over strong wage growth. He forecasts that the Monetary Policy Committee has sufficient grounds to reduce interest rates as early as May. Investors currently estimate the probability of such a move at over 90%, Reuters reports.

Yael Selfin, chief economist at KPMG UK, notes that a nearly 7% increase in the minimum wage this month could slow the pace of wage growth and affect hiring plans.