UK Unemployment: The soft underbelly of the economy is emitting a distress signal

The UK unemployment figures represent the ‘soft underbelly of the UK economy’ and is starting to emit a distress signal, says George Lagarias, Chief Economist at Forvis Mazars:

“The soft underbelly of the UK economy is emitting a distress signal. It’s not just the relentless rise in unemployment, now at a five-year high. It is also private sector wages that for the first time in two and a half years, are not growing above the inflation rate. Household consumption constitutes over 60% of the economy and these numbers may eventually begin to scare consumers away from purchases. The question for markets and the real economy is whether they are enough to also scare the Bank of England into accelerating much anticipated rate cuts.”