LONDON (Reuters) -Britain's jobs market has weakened further, official data showed, with employment falling for a sixth month and vacancies dropping again but wage growth stayed strong, underscoring why the Bank of England is so cautious about cutting interest rates.
With the BoE's top policymakers split over the risks of a slowdown in hiring and a pickup in inflation pressures, the Office for National Statistics said on Tuesday the latest figures pointed to a continued cooling of the labour market.
The number of employees 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.
The reduction in June was revised down to 26,000, less than the originally reported fall of 41,000.
Employers have said an increased tax on them introduced in April by finance minister Rachel Reeves is weighing on their staffing decisions.
Basic wage growth in the private sector edged down to 4.8% in the three months to June. But overall British average weekly earnings, excluding bonuses, grew by 5.0%, far above the roughly 3% level seen as consistent with the BoE's 2% inflation target.
Economists polled by Reuters had mostly expected regular annual wage growth to hold at 5.0%, the same pace as in the three months to May.
Tuesday's data showed that the number of job vacancies fell by 44,000 in the three months to July to 718,000, the lowest number since the three months to April 2021.
The BoE last week cut interest rates to 4% from 4.25% after a tight 5-4 vote by its Monetary Policy Committee.
(Reporting by Suban Abdulla and William Schomberg; Editing by Kate Holton)
