British unemployment has risen further and earnings growth remains elevated, according to official data published on Tuesday. The UK unemployment rate rose to 4.4 percent in the three months to the end of April, up from 4.3 percent in the three months to the end of March, the Office for National Statistics (ONS) said.
“This month’s figures continue to show signs that the labour market may be cooling, with the number of vacancies still falling and unemployment rising, though earnings growth remains relatively strong,” the ONS added. Average regular pay growth excluding bonuses held at 6.0 percent, in what analysts described as concerning for the Bank of England (BoE).
“The stickiness of wage growth in April will be a lingering concern for the BoE,” noted Ruth Gregory, deputy chief UK economist at research consultancy Capital Economics. “But with employment falling sharply and the unemployment rate climbing, we think wage growth will soon be back on a firm downward path.”
The BoE last month held its main interest rate at a 16-year high of 5.25 percent but hinted at a summer reduction as UK inflation cools further. The central bank will announce its latest interest rate decision next week, on June 20, with May inflation data due the day before. UK annual inflation slowed in April to a near three-year low of 2.3 percent, recent data showed, boosting the governing Conservatives before next month’s general election. The Consumer Prices Index measure however held stubbornly above the BoE’s 2.0-percent target.
Discussion about this post