The Bank of England's (BOE) worries are growing after seeing the latest reading in the UK employment data which is less encouraging.
In the three months to September, Britain's unemployment rate unexpectedly rose to 3.6% from 3.5% recorded in the previous period.
Meanwhile, data released by the Office for National Statistics (ONS) also reported that the number of people in work fell by 52,000 between July and September.
The number of job vacancies in the period from August to October was found to have dropped to 1.23 million, the lowest level since the end of 2021 following the problems faced by employers to fill their vacant positions.
This will certainly heighten the BOE's fears that Britain's sagging labor market will add to inflationary pressures, forcing it to raise interest rates even as the economy heads into an expected recession.
In the meantime, wage growth continued to show improvement with an increase of 6.0% (salary including bonus), and 5.7% (excluding bonus) during the period.
The figures underline the case for the central bank to keep raising interest rates as policymakers seek to avoid a 'wage-price spiral' amid soaring inflation.
Wage-price spiral: An increase in wages increases the demand for goods thus causing prices to soar. But, when prices rise, it will push for higher wages, eventually creating a spiral in wages and inflation.
