Today Office of National Statistics reports that unemployment fell to its lowest level in nearly 50 years and stood at 3.7%, while vacancies remain high.

Inflation tomorrow’s figures will show that prices are rising even higher. Deutsche Bank forecasts that inflation will be 9.2%, and on the way to the bank’s projected peak of 10%.

The combination of a hot job market and fast inflation gives Bank of England little choice but to raise rates from 1% to perhaps 3% by the end of the year, further reducing consumer payments.

Yesterday, Sir Dave Rumsden, who sets the stakes, told MPs on the Treasury Committee: “Most members of the committee believe that further tightening of policy will be needed.”

Thomas Pew, an economist with RSM UK, said today’s data “will probably be enough to persuade a majority of the members of the Monetary Policy Committee (MPC) to vote for a further rate hike at the next meeting on June 16.”

The pound, which had been under heavy pressure for several weeks, rose 1.62 cents to $ 1.2479. Despite the abundance of jobs, wages are now lagging behind inflation – wages rose 4.2% from January to March, well behind spending growth by 7%.

Tomorrow’s inflation figures for April are expected to indicate further pain. If the job market is now also weakening, it increases the risk of recession.

Pavel Adrian from the job site Indeed said: “The labor market remained strong despite a 0.1% decline in GDP in March as hiring activity remained high: 2.1 million people started new jobs in the first quarter of the year. . However, the clouds we are gathering on the UK’s economic outlook, and due to the deepening cost of living crisis, this could be the last strong month before we see a slowdown in the job market, which is usually lagging behind. ”

Payments in some areas are still rising sharply. In particular, there is a boom in wages in the city: wages in financial services rose by almost 11%, mainly due to bonuses.

Victor Trokudes from the savings app Plum said: “There is a big difference between the growth of wages in the private sector by 8.2% and the growth in the public sector by 1.6%. “Interestingly, the growth of the private sector is largely due to bonuses that are not something ordinary. it is safe to expect in the future if their finances keep pace with rising inflation. ”

Yesterday, the head of the Bank of England Andrew Bailey warned about the “apocalyptic” rise in food prices in connection with the war in Ukraine. He acknowledges that the Bank of England is now facing the biggest test since gaining independence from the government 25 years ago.

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