SJP's Hetal Mehta: 'Cracks' in UK labour market increase recession risk

Pressure on recessionary outlook

The UK economy is still on a path to recovery but head of economic research at St James's Place Hetal Mehta said said "cracks" in the unemployment data have increased the risk of a recession.

Unemployment data edges up and wage growth persists despite a recent cooldown with the  Office for National Statistics revealing that the UK unemployment rate rose to 4.3% in the first quarter, up from 3.8% during the last three months of 2023. Mehta similarly argued the US economy is "not out of the woods" yet, after the Federal Reserve decided this keep interest rates steady this month as inflation persisted. In April, US inflation dropped to 3.4%, down from 3.5% the previous month, prompting bets on interest rate cuts later this year. US inflation drops to 3.4% in April Mehta...