Steady Unemployment Rates and Rising Wages

As reported by City Am, the UK unemployment rate remained steady at 4.3% in October, while wage growth exceeded expectations, climbing to 5.2%. This rise was partly driven by public sector pay increases, with private sector earnings growing even faster at 5.4%. While these figures might indicate resilience in the labour market, many analysts remain cautious, citing structural challenges and potential economic headwinds.

Increased Affordability and Activity in Prime Property
Higher wage growth, particularly in the private sector, points to greater disposable incomes among affluent buyers, enhancing their capacity to invest in high-value assets. This could boost activity in prime property markets, especially in desirable areas such as London and the Home Counties, where demand often aligns with rising financial confidence.

Inflationary Pressures
Although rising wages can support consumer confidence, persistent wage inflation may constrain the Bank of England’s ability to lower interest rates in the medium term. With policymakers determined to manage inflation within agreed limits, this could prolong the current level of borrowing costs.

Resilience
Islay Robinson, Enness Global commented, ‘Its evident the UK labour market continues to display pockets of steady resilience, presenting both opportunities and challenges for property investors over the coming year. While wage increases may invigorate demand, vigilance is essential amid potential shifts in monetary policy and broader economic sentiment. For those aiming to capitalise on current conditions and unlock richer opportunities in 2025, timing and strategic foresight will be crucial’.