The United Kingdom’s unemployment rate has risen more than expected amid fears of a stalling economy.
The Office for National Statistics said the unemployment rate increased to 4.2 percent in February from 3.9 percent, well above the 4 percent expected by City economists.
Most economists had anticipated a slight increase to 4 percent in the quarter. However, official figures revealed a different story, showing that regular wage growth, excluding bonuses, actually declined once again, falling to 6 percent in the three months to February.
Despite this decline in wage growth, the impact of falling inflation resulted in real regular wages rising by 2.1 percent, marking the highest increase in almost two-and-a-half years.
Liz McKeown, Director of Economic Statistics at the ONS, commented on these trends, stating, “Recent indicators have shown a continued decline in vacancy numbers and a slowdown in earnings growth, albeit at a slower pace.
“At the same time, there are early signs that the job market is beginning to stabilize, accompanied by a decrease in the headline employment rate from our survey and a reduction in the total number of people on payrolls according to HMRC data.”
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.
Meanwhile, vacancies continued to decline, marking the 21st consecutive period of decrease, with numbers dropping from 13,000 quarter on quarter to 916,000 in the first three months of 2024.
This data follows the UK’s entry into recession at the end of last year, although experts believe this downturn may be short-lived, as recent output data suggests the economy is poised for overall growth in the first quarter.
Additionally, the official figures revealed a decline in regular wage growth, excluding bonuses, which fell back to 6 percent in the three months to February from 6.1 percent in the previous three months.
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