The UK unemployment rate has fallen unexpectedly to its lowest level since last summer as inactivity in the jobs market increases and vacancies tumble, according to official figures.<\/p>\n
The Office for National Statistics (ONS) said the rate of UK unemployment dropped sharply to 4.9% in the three months to February, down from 5.2% in the three months to January and lowest since August last year.<\/p>\n
Most economists had expected the jobless rate to remain unchanged.<\/p>\n
The ONS said the fall was driven by a rise in inactivity, especially among students, which lifted by 70,000 in the quarter.<\/p>\n
The figures also showed average regular wage growth dropped further, to 3.6% in the three months to February, down from 3.8% in the previous three months and remaining at the lowest level since November 2020.<\/p>\n
Earnings are still outstripping inflation, rising by 0.4% with the Consumer Prices Index (CPI) taken into account, but this is the lowest real growth for more than two-and-a-half years.<\/p>\n
Vacancies also plunged by 29,000 to 711,000 in the three months March \u2013 now the lowest level since April 2021.<\/p>\n
Liz McKeown, ONS director of economic statistics, said: \u201cAlongside falling unemployment, the number of people not actively seeking work increased, with data suggesting fewer students seeking work alongside their studies.<\/p>\n
\u201cRegular wage growth has slowed further with growth at its lowest rate in over five years.\u201d<\/p>\n
Youth unemployment stood at 15.8% for 16 to 24-year-olds in the three months to February, down from 15.9% in the previous quarter.<\/p>\n
While the jobless rate fell, the ONS cautioned the figures should be treated with caution given an overhaul to the way the figures are collected.<\/p>\n
More timely data estimated the number of workers on UK payrolls dropped 11,000 month-on-month in March to 30.3 million, though this is subject to revision.<\/p>\n
This follows a revised 6,000 drop during February, against the 20,000 increase previously estimated.<\/p>\n
The data comes amid fears of a spike in unemployment as the Iran war takes its toll on the UK economy, with the Item Club forecasting the jobless rate will surge to 5.8% by the middle of 2027, with almost 250,000 more people without a job.<\/p>\n
Work and Pensions Secretary Pat McFadden said: \u201cWe cannot escape the effects of the war in the Middle East which are likely to feed through to prices and employment in the coming months.<\/p>\n
\u201cWe will do everything we can to support the country through this period.\u201d<\/p>\n
But the Conservatives took aim at the rise in inactivity and recent wage tax hikes.<\/p>\n
The inactivity rate increased to 21% in the three months to February, up from 20.7% in the previous three months and the highest level for over 18 months.<\/p>\n
Shadow work and pensions secretary Helen Whately said: \u201cThis month\u2019s dip in unemployment is outweighed by the rise in people who are economically inactive, who have left the labour market altogether.\u201d<\/p>\n
She added: \u201cLabour\u2019s taxes and red tape have killed opportunity for many thousands of people.\u201d<\/p>\n
Thomas Pugh, chief economist at RSM UK, warned rising costs caused by the Iran war will see unemployment increase over the next few months.<\/p>\n
He said: \u201cThe risk is that rising energy prices prompt a big pull back in consumer demand while simultaneously pushing up input costs for businesses, which would push the unemployment rate even higher.<\/p>\n
\u201cWe now think the unemployment rate will probably peak at around 5.5%.<\/p>\n
\u201cIf energy prices rise higher over the summer as supply becomes even more constricted, the unemployment rate could move towards 6%.<\/p>\n
\u201cThat is a key reason why the Bank of England will almost certainly keep interest rates on hold at its meeting next week.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"The UK unemployment rate has fallen unexpectedly to its lowest level since last summer as inactivity in the…\n","protected":false},"author":2,"featured_media":598756,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,101,260775,17111,54271,2457,70751],"class_list":{"0":"post-598755","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-inactivity","11":"tag-jobless-rate","12":"tag-office-for-national-statistics","13":"tag-unemployment-rate","14":"tag-wage-growth"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/598755","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=598755"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/598755\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/598756"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=598755"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=598755"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=598755"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}