By Lucy Adautin
The British unemployment rate has increased, while earnings growth remains high, according to official data released on Tuesday.
The unemployment rate reached 4.4% in the three months leading up to April, marking the highest level since September 2021.
“This month’s figures continue to show signs that the labour market may be cooling, with the number of vacancies still falling and unemployment rising, though earnings growth remains relatively strong,” stated the Office for National Statistics (ONS).
Average regular pay growth, excluding bonuses, held steady at 6%, a trend analysts find troubling for the Bank of England (BoE).
” The stickiness of wages growth in April will be a lingering concern for the BoE,” said Ruth Greogry, deputy chief UK economist at research consultancy Capital Economics.
“But with employment falling sharply and unemployment rate climbing, we think wage growth will soon be back on a firm downward path”.
Last month, the BoE maintained its interest rate at a 16-year high of 5.25%, but suggested a possible reduction over the summer as UK inflation continues to cool.
The central bank is set to announce its latest interest rate decision next week on June 20, with May inflation data to be released the day before.
Recent data indicated that UK annual inflation slowed in April to a near three-year low of 2.3%, which has provided a boost to the governing Conservative Party ahead of next month’s general election.
However, the Consumer Price Index measure remained stubbornly above the BoE’s 2.0% target.
