What does yesterday’s interest rate cut mean for the job market?
Yesterday the Bank of England cut Base Rates by .25% to 5%. Not much of a cut but it’s significant as it means the cycle of interest rate rises has reversed and we are hopefully now in a period of rate reductions as the covid-era inflation (caused by reckless money-printing) has been tamed.
Banks have been telling me that all we need is the first cut in interest rates to give consumer confidence back. Businesses feel more assured borrowing money to invest in people, plant, equipment and property. People feel more confident in the housing market and bring forward expenditure on household goods, building work and possibly buying a new home.
For the job market this all has to be good but when we have a lack of people out there looking for work it’s not that simple. The inflationary cycle could be stoked again and further interest rate cuts might be slow in coming.
Perhaps the labour government have a plan to increase legal immigration so there are more people looking for jobs? This would prove deeply unpopular at the moment as migration is one of the main concerns of our time. However, with such a big majority in Parliament does Kier Starmer really care what people think of his policies?
It’s clear we need a fair and honest debate about legal migration as we need people to come to the UK to work. Unfortunately we are not having that debate at the moment. We need the right migrants with the right skills not just open borders for European’s as we did before Brexit.
So the interest rate cut will be good for anyone borrowing money and will bolster the already strong job market. Let’s hope we have some more interest rate cuts soon!
Happy job hunting!
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