From the mid-seventies to the mid-eighties’ redundancy became a significant factor of working life as more firms rationalized their workforce to deal with the slowing economy.

It is possible that the same effect is taking place now, with the number of redundancies growing larger month-by-month as firms first reconsider their investment plans and then abandon them altogether.

While it was sensible to “stockpile” workers given the cost of rehiring them if the economy rapidly recovered, given the wage demands and shortage of both skilled and unskilled workers, today’s employment report for July could deliver the first definitive evidence of the effect that the long-running cycle of rate hikes is having on the economy.

The claimant count has been on an upwards trajectory over the past few months, and that is expected to continue, while wage increases may be levelling off.

The data that has been released over the current quarter has not really demonstrated any significant slowdown, but the seventy-five basis points of hikes at the past two meetings of the MPC may see tighter monetary policy begin to bite.

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