UK rate quandary as hiring falls amid high wage growth

Britain's job market has weakened again, data showed, with payrolls falling for a sixth month and vacancies dropping further, but wage growth stayed strong, underscoring why the Bank of England (BOE) is so cautious about cutting interest rates.

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LONDON -

With the central bank's policymakers split over the risks of a hiring slump and a pickup in inflation pressures, data from the Office for National Statistics (ONS) pointed to a continued cooling of the labour market, albeit less sharply than in recent months.

The number of staff on company payrolls, as measured by tax office data, fell by a provisional 8,000 in July from June, extending a run of declines that began in February but the smallest decline in that run.

The June reduction was revised down to 26,000, fewer than the originally reported fall of 41,000.

Employers say Finance Minister Rachel Reeves' decision to raise a tax on them is weighing on their staffing and pay decisions, and causing an increase in their prices.