UK Job Market - Unemployment Surges
The UK's labor market is being negatively impacted by economic uncertainty as evidenced by the country's unexpected increase in the unemployment rate and the subsequent slowdown in earnings growth.
According to the Office for National Statistics (ONS), the unemployment rate increased from 3.9% in the three months leading up to January to 4.2% in the three months leading up to February, the highest level in almost six months.
The majority of economists had predicted that the rate would only marginally increase to 4% throughout the quarter.
The official data also revealed that, in the three months leading up to February, regular salary growth—excluding bonuses—fell back to 6%.
However, when the Consumer Prices Index (CPI) was taken into consideration, real regular salaries increased by 2.1%, the largest amount in over two and a half years, due to declining inflation.
"Recent trends of falling vacancy numbers and slowing earnings growth have continued this month, albeit at a reduced pace," stated Liz McKeown, director of economic statistics at the ONS.
"At the same time, we are now seeing tentative signs that the jobs market is beginning to cool, with both a fall in the headline employment rate from our survey and a drop in the total number of people on payrolls from HMRC data."
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