UK interest rates likely to rise again despite slowing labour market

Increase in unemployment and slowing jobs growth will not counteract strong pay pressure

• Record UK pay growth adds to pressure for interest rate rise

Unemployment is up. The number of job vacancies is down. The rate of jobs growth is slowing and at a time when the number of people looking for work is rising. There are signs that the UK labour market is starting to slow.

These developments have to be put into perspective. They are straws in the wind rather than evidence that demand for jobs is about to collapse. And, crucially, the signs of a possible turning point will almost certainly not be conclusive enough to prevent the Bank of England from raising interest rates again next month.