Unemployment Rate Increases While Pay Growth Rises Faster than Expected

The UK’s unemployment rate ticked up to 3.8% in the three months to February, according to official figures that also highlighted a faster than expected spike in wage rises.

The Office for National Statistics (ONS) said the jobless rate rose from 3.7% due to a surge in the number of people unemployed for more than six months.

The rate rose despite part-time employees and self-employed workers driving an increase in the employment rate. There was also a signal in the wider ONS figures of upwards pressure to come on the unemployment rate as the number of people claiming jobless benefits rose by 28,200 in March.

Sky News is reporting that the data also revealed that vacancies fell by another 47,000 to 1.1 million in the three months to March.

The ONS said this reflected “uncertainty across industries, as survey respondents continue to cite economic pressures as a factor in holding back on recruitment”.

Total pay, including bonuses, grew at an annual rate of 5.9% in the three months to February.

That was up from the 5.7% measured the previous month and at a time when energy-driven inflation remained at a 40-year high above 10%.

Regular pay growth was static at 6.6%.The pace of wage rises is a closely-watched measure as the cost of living crisis evolves – and not just for pinched consumers.

As strike action over pay continues to hammer several sectors including the NHS, the Bank of England has urged wage restraint.

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