Britain’s jobless rate jumps to 4.2%

BRITAIN’S unemployment rate has risen by more than expected and earnings growth has eased back once again in the latest sign that economic uncertainty is affecting the UK jobs market.

The Office for National Statistics (ONS) said the jobless rate jumped to 4.2% in the three months to February – the highest level for nearly six months and up from 3.9% in the three months to January.

Most economists had been expecting the rate to only edge up slightly to 4% in the quarter.

The official figures also showed regular wages growth, excluding bonuses, falling back once again, to 6% in the three months to February from 6.1% in the previous three months.

Thanks to falling inflation, when taking the Consumer Prices Index (CPI) into account, real regular wages rose by 2.1%, which is the highest for almost two-and-a-half years.

But the drop in earnings growth was less than expected, with economists pencilling in a fall to 5.9%.

Experts said the weaker-thanexpected employment figures reinforce the case for the Bank of England to cut interest rates, possibly as early as June.

Rob Wood, chief UK economist at Pantheon Macroeconomics, said: “There is solid evidence the labour market slowed markedly in March.

“Rate-setters will take note. “Wages lag labour market slack, so these figures will likely embolden the Monetary Policy Committee to begin cutting interest rates this summer.”

More timely data from HM Revenue & Customs also revealed that the number of workers on payrolls fell by 67,000, or 0.2%, to 30.3 million in March.

This is the biggest drop since the quarter to November 2020 at the height of the pandemic, although the figures are estimates and subject to revision.