What is causing jobs gloom and how will voters react?

Inflation will soon tick up again thanks to rising food and energy prices, some “domestically generated” pressure in the service sector, and pay settlements.

- SEAN O'GRADY

On the other hand, the labour market is showing signs of weakening, with fewer people in work and vacancies down – though unemployment is steady, at 4.7 per cent. We also know that the public finances are under pressure as we approach the Budget. Still, it’s not all bad news…

Why is the jobs market weakening?

It is especially weak in more labour-intensive areas where the effects of the hike in employers’ national insurance contributions (NICs) and the higher minimum wage are being most keenly felt: pubs, restaurants, leisure and hotels. Smaller and medium-sized businesses are nervous about investing while larger players have been badly affected by Trump tariffs and a generally more unsettled world. Global pressure on costs has also stopped the Bank of England from cutting interest rates as quickly as once hoped.