The U.K. unemployment rate remained unchanged in January, data showed Thursday, and wage growth also held steady, providing the Bank of England with the potential to resume its rate-easing path later in the months to come.
According to the Office for National Statistics, the jobless rate remained at 4.4% in the three months to January, unchanged from the prior the three months to August.
This was as expected, but remains the highest level since the three months ending in May.
Importantly, pay growth across the whole economy, excluding bonuses, also held steady at an annual 5.9% rate in the three months to January.
The policymakers have been studying wage growth figures closely, particularly after Britain’s consumer price index rose by 3% in the 12 months to January, the latest month for which data is available.
This is a full percentage point above the Bank of England’s 2% medium-term target.
A report from human resources data firm Brightmine, released before the unemployment data, indicated that pay increases granted by British employers have fallen back in line with inflation for the first time since October 2023.
Brightmine said employers were cautious before April’s rise in payroll taxes and the median pay award in the three months to the end of February held at 3% for the third consecutive rolling quarter, the joint lowest pace of increase since December 2021.
Concerns over inflation are expected to result in the Bank of England keeping its key interest rate unchanged at 4.5% at the conclusion of its policy-setting meeting later in the session.
Source: Investing