‘All told, the combination of meagre wage growth despite very low unemployment supports the Monetary Policy Committee’s view that enough slack remains in the labour market to warrant keeping rates on hold during the imminent period of high inflation’. – Samuel Tombs, Pantheon Macroeconomics
The British unemployment rate hit its lowest level since 1975 in the three-month period to January, while the number of Britons filing for unemployment benefits dropped for the third consecutive month in February. The Office for National Statistics reported on Wednesday that the claimant count fell 11,300 to 734,700, the lowest level since May 1975, last month, following January’s downwardly revised decline of 41,400 and surpassing analysts’ expectations for a rise of 3,200. The ONS also reported that the unemployment rate dropped to 4.7%, the lowest since the summer of 1975, in three months to January, amid a 31,000 decline in the number of unemployed people. Meanwhile, analysts expected the rate to remain unchanged from the prior period at 4.8%. On the downside, average earnings rose just 2.2% on an annual basis in January, after climbing 2.6% in the prior month, whereas economists penciled in a 2.4% increase. The ONS senior statistician David Freeman said that even though the unemployment rate hit its lowest since 1975, slow wage growth and surging inflation raised concerns over the health of the UK labour market. After the release, the British Pound rose markedly against the US Dollar, touching its intraday high at 1.2257.
