- Unemployment in the UK unexpectedly falls to just 4.3%, down from 4.4%.
- That reversed last month’s data, which showed unemployment rising from 4.3% to 4.4%.
- While unemployment fell, employment rose, with 32.25 million people in work, at a rate of 75.3%.
LONDON – Unemployment in the UK unexpectedly fell between November and January, according to new data released by the Office for National Statistics on Wednesday.
The headline unemployment rate, which measures the percentage of the British workforce who want a job but don’t have one, fell from 4.4% to 4.3%, reversing an increase seen in data released last month.
There were 1.45 million unemployed people in the UK over the period, according to the ONS. That marks an increase of 24,000 from August to October 2017.
While unemployment fell, employment rose, with 32.25 million people in work, 168,000 more than for August to October 2017. The overall rate of employment was 75.3%, the ONS said.
“Employment and unemployment levels were both up on the quarter, with the employment rate returning to its joint highest ever,” Matt Hughes, a senior statistician at the ONS said.
“‘Economically inactive’ people – those who are neither working nor looking for a job – fell by their largest amount in almost five and a half years, however.”
Here’s the ONS’ chart showing Wednesday’s data as part of the longer-term trend:
Average earnings were in line with forecasts, the ONS said, with earnings increasing by 2.6% over the data period, compared to an increase of 2.5% at last month’s reading.
The UK’s Consumer Prices Index (CPI) inflation rate – the key measure of inflation – dropped to 2.7% in February. That means that while earnings growth may be picking up, people are still not seeing wages rise quick enough to keep up with prices.
“Total earnings growth continues to nudge upwards in cash terms. However, earnings are still failing to outpace inflation,” Hughes said.
The Bank of England expects real wage growth to move into positive territory during 2018.
The bank’s monthly agents’ summary of business conditions, which polls the central bank’s operatives in the UK’s regions for a picture of what’s going on in the economy, last month showed that businesses expect wage growth to increase to 3.1% in 2018, up from 2.6% last year.
The bank will announce its latest monetary policy decisions on Thursday, with Wednesday’s employment figures – which it was given special early access to – likely to play at least some part in those decisions.