UK jobless rate rises, potentially easing Bank of England inflation worries
The unemployment rate in Britain rose to 3.9% in the three months to March, which was unexpected.
Important Points
The number of vacancies fell for a tenth consecutive time during the three-month period ending in April. This is the lowest level since mid-2021.
The Bank of England may have been less concerned about inflation after the unexpected rise in unemployment to 3.9%. This was due to more people returning to the job market.
Reuters polled economists who expected that the rate would remain at 3.8%.
Investors re-evaluated their view on whether the BoE would pause its rate hikes when it meets next in June. The rate futures market puts the likelihood of a pause in interest rates at around 30%.
The ONS reported that provisional data from Britain’s tax office revealed the first decline in total employees pay-rolled in over two years, with a decrease of 136,000 in April compared to March.
The number of vacancies fell for the 10th consecutive time during the three-month period ending in April. This is the lowest level since mid-2021.
The BoE is currently debating whether or not to increase interest rates. However, the rate of pay growth has remained high by historical standards.
The basic pay increased by 6.7% over the last three months compared to the same period in 2012. This is a slight increase from the 6.6% that was seen in February.
Reuters polled economists who expected earnings to rise by a higher 6.8%.
This increase is largely due to the acceleration of wage growth in the public sector.
According to a Reuters poll, the annual pay growth for bonuses and wages remained at 5.8%.
Darren Morgan, Director of Economic Statistics at the Office for National Statistics (ONS), said that men are primarily responsible for the flow of people looking for or returning to work.