Latest news with #PwCUK
Yahoo
3 hours ago
- Business
- Yahoo
UK jobs data increase chances of more Bank of England interest rate cuts
The UK labour market continued to cool in April, with the latest ONS figures showing unemployment at 4.6% and a 0.2% drop in payrolled employees — or 55,000 fewer jobs — from the previous month. It marks the first time the unemployment rate has crept above pre-pandemic levels. The data helps pave the way for the Bank of England to make further interest rate cuts, according to some analysts. The downturn in the employment market and a deceleration in wage growth has the potential to take the heat out of inflation in the rest of the economy, making it easier for the central bank to maintain its trajectory of lowering borrowing costs. Annual wage growth excluding bonuses eased to 5.2% in the latest figures, marking the second consecutive monthly decline. The number of payrolled employees fell by 115,000 (0.4%) between April 2024 and April 2025, the data showed. 'There continues to be weakening in the labour market, with the number of people on payroll falling notably," said ONS director of economic statistics Liz McKeown. "Feedback from our vacancies survey suggests some firms may be holding back from recruiting new workers or replacing people when they move on." The data comes ahead of a key moment for the government: chancellor Rachel Reeves will present her spending review to parliament on Wednesday. On Monday, it was revealed the review is set to contain changes to winter fuel allowance thresholds for pensioners. There has been some speculation it will also look to alter National Insurance thresholds, which were increased to help plug holes in the fiscal deficit. 'If there's any upside, it may be in the battle to control inflation," said Paige Tao, an economist at PwC UK. "This gradual cooling in pay growth may offer some reassurance to the Bank of England, following last month's inflation reading unexpectedly jumping to its highest level in over a year. However, with wage growth remaining high in absolute terms, the Bank may want to see this trend continue before proceeding with further rate cuts." Read more: What the winter fuel allowance U-turn means for your finances In May's meeting, the UK's central bank cut interest rates to 4.25% amid a global trade war and a weak domestic economy. That was its fourth reduction since rates peaked at 5.25% last year. At the time, BoE governor Andrew Bailey said policymakers needed to stick to a 'gradual and careful' approach to cutting interest rates. Bailey said: 'Inflationary pressures have continued to ease so we've been able to cut rates again today. The past few weeks have shown how unpredictable the global economy can be. 'That's why we need to stick to a gradual and careful approach to further rate cuts. Ensuring low and stable inflation is our top priority.'Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 hours ago
- Business
- Yahoo
UK jobs data increase chances of more Bank of England interest rate cuts
The UK labour market continued to cool in April, with the latest ONS figures showing unemployment at 4.6% and a 0.2% drop in payrolled employees — or 55,000 fewer jobs — from the previous month. It marks the first time the unemployment rate has crept above pre-pandemic levels. The data helps pave the way for the Bank of England to make further interest rate cuts, according to some analysts. The downturn in the employment market and a deceleration in wage growth has the potential to take the heat out of inflation in the rest of the economy, making it easier for the central bank to maintain its trajectory of lowering borrowing costs. Annual wage growth excluding bonuses eased to 5.2% in the latest figures, marking the second consecutive monthly decline. The number of payrolled employees fell by 115,000 (0.4%) between April 2024 and April 2025, the data showed. 'There continues to be weakening in the labour market, with the number of people on payroll falling notably," said ONS director of economic statistics Liz McKeown. "Feedback from our vacancies survey suggests some firms may be holding back from recruiting new workers or replacing people when they move on." The data comes ahead of a key moment for the government: chancellor Rachel Reeves will present her spending review to parliament on Wednesday. On Monday, it was revealed the review is set to contain changes to winter fuel allowance thresholds for pensioners. There has been some speculation it will also look to alter National Insurance thresholds, which were increased to help plug holes in the fiscal deficit. 'If there's any upside, it may be in the battle to control inflation," said Paige Tao, an economist at PwC UK. "This gradual cooling in pay growth may offer some reassurance to the Bank of England, following last month's inflation reading unexpectedly jumping to its highest level in over a year. However, with wage growth remaining high in absolute terms, the Bank may want to see this trend continue before proceeding with further rate cuts." Read more: What the winter fuel allowance U-turn means for your finances In May's meeting, the UK's central bank cut interest rates to 4.25% amid a global trade war and a weak domestic economy. That was its fourth reduction since rates peaked at 5.25% last year. At the time, BoE governor Andrew Bailey said policymakers needed to stick to a 'gradual and careful' approach to cutting interest rates. Bailey said: 'Inflationary pressures have continued to ease so we've been able to cut rates again today. The past few weeks have shown how unpredictable the global economy can be. 'That's why we need to stick to a gradual and careful approach to further rate cuts. Ensuring low and stable inflation is our top priority.'Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Powys County Times
4 hours ago
- Business
- Powys County Times
Jobless rate surges to highest since 2021 while pay growth eases sharply
Britain jobless rate surged to its highest level for nearly four years and pay growth for UK workers eased by more than expected as employers faced surging staff costs, official figures have shown. The Office for National Statistics (ONS) said average regular earnings, excluding bonuses, fell sharply to 5.2% in the three months to April, from a revised 5.5% in the previous three months and the lowest since the third quarter of last year. While this is still outstripping inflation, up by 2.1% with Consumer Prices Index inflation taken into account, it was lower than predicted, with most experts pencilling in a fall to 5.3%. The rate of unemployment also jumped to 4.6% in the three months to April, up from 4.5% in the three months to March and the highest level since the three months to July 2021, although the ONS continues caution over the reliability of the statistic. It coincided with firms facing a hike in national insurance contributions in April, which had been announced in October's budget, as well as a rise in the minimum wage. The figures also showed vacancies tumbled by 63,000 to 736,000 in the three months to May, while payroll data revealed the biggest drop for five years last month, down 109,000 to 30.2 million. This followed a revised 55,000 drop in payrolled workers between March and April. Liz McKeown, ONS director of economic statistics, said: 'There continues to be weakening in the labour market, with the number of people on payroll falling notably. 'Feedback from our vacancies survey suggests some firms may be holding back from recruiting new workers or replacing people when they move on.' There are fears that the 'Awful April' rise in staff costs for firms will send unemployment levels soaring, with some firms already moving to cut jobs ahead of the tax increase. In February to April 2025, average weekly earnings were up 5.2% on the year excluding bonuses and 5.3% including bonuses. Regular pay grew fastest in the retail and hospitality sector. Learn more about this release ➡ — Office for National Statistics (ONS) (@ONS) June 10, 2025 Paige Tao, economist at PwC UK, said: 'With rising national insurance costs, a higher minimum wage and escalating global tariffs all contributing to heightened cost pressures for employers, today's figures show that businesses are clearly feeling the squeeze.' The Institute of Directors raised concerns that 'the business case for hiring new staff has been dealt a series of blows' by rising staff costs and upcoming changes to employment law. Despite the fall in pay growth, economists said earnings so far remained robust – buoyed by the recent minimum wage rise. The Bank of England will be weighing this up carefully against clear signs of a weakening jobs market, according to economists. 'The labour market looks in worse shape in May, which could tip the Monetary Policy Committee (MPC) into cutting rates again in August,' said Rob Wood at Pantheon Macroeconomics. Matt Swannell, chief economic adviser to the EY Item Club, said he believed a cut in June remained unlikely, but that rates may come down again in August. 'Today's data is likely to reinforce the view that underlying inflationary pressures are cooling, but with pay growth still far above the rate consistent with inflation returning sustainably to 2%, most of the MPC will still want to act cautiously to guard against sticky inflation,' he said.
West Australian
2 days ago
- Business
- West Australian
New research busts 6 AI myths: Artificial intelligence makes workers ‘more valuable, not less'
Despite widespread fears that artificial intelligence could automate jobs and cut employees' wages, AI actually makes people 'more valuable, not less', new research by professional services firm PwC has found. 'What causes people to react in this environment is the speed of the tech innovation,' PwC global chief AI officer Joe Atkinson said. 'The reality is that the tech innovation is moving really, really fast. It's moving at a pace that we've never seen in a tech innovation before. 'What the report suggests, actually, is AI is creating jobs.' In fact, both jobs and wages are growing in 'virtually every' AI-exposed occupation — or jobs that have tasks where the technology can be used — including those that are the most automatable, such as customer service workers or software coders, according to the 2025 AI Jobs Barometer report. 'We know that every time we have an industrial revolution, there are more jobs created than lost. The challenge is that the skills workers need for the new jobs can be quite different,' said Carol Stubbings, PwC UK's global chief commercial officer, in the report. 'So the challenge, we believe, is not that there won't be jobs. It's that workers need to be prepared to take them.' The report, which analysed more than 800 million job ads and thousands of company financial reports across six continents, challenged six common myths about AI's impact: Myth: AI has not yet had a significant impact on productivity. However, the report found that since 2022, productivity growth in industries 'best positioned to adopt AI' has nearly quadrupled, while falling slightly in industries 'least exposed' to AI, such as physical therapy. Notably, the industries that are the most exposed to AI, such as software publishing, showed three times higher growth in revenue per employee, according to PwC's data. Myth: AI can have a negative impact on workers' wages and bargaining power. PwC's data showed that the wages of workers with AI skills are on average 56 per cent higher compared to workers without these skills in the same occupation, up from 25 per cent last year. In addition, wages are rising twice as fast in industries that are the most exposed to AI compared to the industries least exposed. Myth: AI may lead to a decrease in job numbers. The report found that while occupations with lower exposure to AI saw strong job growth at 65 per cent between 2019 and 2024, growth remained robust — albeit slower — even in occupations more exposed to the technology (38 per cent). Myth: AI may exacerbate inequalities in opportunities and wages for workers. Contrary to fears that AI will worsen inequality, the report findings show that wages and employment are rising for jobs that are augmentable and automatable by the technology. The report noted that employer demand for formal degrees is declining faster in AI-exposed jobs, creating broader opportunities 'for millions'. Myth: AI may 'deskill' jobs that it automates. The report found that instead, AI can enrich automatable jobs by freeing up employees from tedious tasks to practice more complex skills and decision-making. For example, data entry clerks can evolve into a 'higher value' role such as data analysts, according to PwC. Myth: AI may devalue jobs that it highly automates. The data shows that not only are wages rising for jobs that are highly automatable, but the technology is also reshaping these jobs to become more 'complex and creative', and ultimately, make people more valuable. The study offers another perspective: In a world where many countries have declining working-age populations, softening job growth in AI-exposed occupations could even 'be helpful' and benefit such countries. The productivity boost by AI can actually create a 'multiplier effect' on the available workforce and satisfy the gaps that companies might not have been able to be fill otherwise, as well as growth for businesses, Mr Atkinson said. 'It's a prediction supported already by the productivity data we're seeing,' he added. 'I think it could absolutely and will be a good thing.' Ultimately, the study takes the stance that AI should be treated 'as a growth strategy, not just an efficiency strategy'. Rather than using the technology to cut costs on headcount, companies should help their employees adapt and work together to create new opportunities, claim new markets and revenue streams. 'It is critical to avoid the trap of low ambition. Instead of limiting our focus to automating yesterday's jobs, let's create the new jobs and industries of the future,' the report said. 'AI, if used with imagination, could spark a flowering of new jobs and new business models. For example, two-thirds of jobs in the US today did not exist in 1940, and many of these new jobs were enabled by advances in technology,' the report added. CNBC
CNBC
4 days ago
- Business
- CNBC
New research busts 6 AI myths: Artificial intelligence makes workers 'more valuable, not less'
Despite widespread fears that artificial intelligence could automate jobs and cut employees' wages, AI actually makes people "more valuable, not less," new research by professional services firm PwC found. "What causes people to react in this environment is the speed of the tech innovation," PwC Global Chief AI Officer, Joe Atkinson told CNBC Make It. "The reality is that the tech innovation is moving really, really fast. It's moving at a pace that we've never seen in a tech innovation before." "What the report suggests, actually, is AI is creating jobs," Atkinson said. In fact, both jobs and wages are growing in "virtually every" AI-exposed occupation — or jobs that have tasks where the technology can be used — including those that are the most automatable, such as customer service workers or software coders, according to the 2025 AI Jobs Barometer report. "We know that every time we have an industrial revolution, there are more jobs created than lost. The challenge is that the skills workers need for the new jobs can be quite different," said Carol Stubbings, PwC UK's global chief commercial officer, in the report. "So the challenge, we believe, is not that there won't be jobs. It's that workers need to be prepared to take them," said Stubbings. The report, which analyzed over 800 million job ads and thousands of company financial reports across six continents, challenged six common myths about AI's impact: Myth: AI has not yet had a significant impact on productivity. However, the report found that since 2022, productivity growth in industries "best positioned to adopt AI" has nearly quadrupled, while falling slightly in industries "least exposed" to AI, such as physical therapy. Notably, the industries that are the most exposed to AI, such as software publishing, showed three times higher growth in revenue per employee, according to PwC's data. Myth: AI can have a negative impact on workers' wages and bargaining power. PwC's data showed that the wages of workers with AI skills are on average 56% higher compared to workers without these skills in the same occupation, up from 25% last year. In addition, wages are rising twice as fast in industries that are the most exposed to AI compared to the industries least exposed. Myth: AI may lead to a decrease in job numbers. The report found that while occupations with lower exposure to AI saw strong job growth at 65% between 2019 and 2024, growth remained robust — albeit slower — even in occupations more exposed to the technology (38%). Myth: AI may exacerbate inequalities in opportunities and wages for workers. Contrary to fears that AI will worsen inequality, the report findings show that wages and employment are rising for jobs that are augmentable and automatable by the technology. The report noted that employer demand for formal degrees is declining faster in AI-exposed jobs, creating broader opportunities "for millions". Myth: AI may "deskill" jobs that it automates. The report found that instead, AI can enrich automatable jobs by freeing up employees from tedious tasks to practice more complex skills and decision making. For example, data entry clerks can evolve into a "higher value" role such as data analysts, according to PwC. Myth: AI may devalue jobs that it highly automates. The data shows that not only are wages rising for jobs that are highly automatable, but the technology is also reshaping these jobs to become more "complex and creative," and ultimately, make people more valuable. The study offers another perspective: In a world where many countries have declining working-age populations, softening job growth in AI-exposed occupations could even "be helpful" and benefit such countries. The productivity boost by AI can actually create a "multiplier effect" on the available workforce and satisfy the gaps that companies might not have been able to be fill otherwise, as well as growth for businesses, said Atkinson. "It's a prediction supported already by the productivity data we're seeing," he added. "I think it could absolutely and will be a good thing." Ultimately, the study takes the stance that AI should be treated "as a growth strategy, not just an efficiency strategy." Rather than using the technology to cut costs on headcount, companies should help their employees adapt and work together to create new opportunities, claim new markets and revenue streams. "It is critical to avoid the trap of low ambition. Instead of limiting our focus to automating yesterday's jobs, let's create the new jobs and industries of the future," the report said. "AI, if used with imagination, could spark a flowering of new jobs and new business models. For example, 2/3 of jobs in the U.S. today did not exist in 1940, and many of these new jobs were enabled by advances in technology," the report added.
