- Unemployment jumps to 4.3%
- Wage growth remains stubbornly high at 6% – or 2.4% adjusted for inflation
- Economic inactivity stays above 22%
Danni Hewson, AJ Bell head of financial analysis, comment on the latest UK jobs figures:
“Andrew Bailey made it clear that ratesetters would be carefully considering the array of economic data barrelling our way between this month’s Bank of England decision and the next meeting in June.
“Today’s jobs figures do little to move the dial with the labour market continuing to cool but wage growth coming in hot. Once our nemesis inflation is taken into account average regular earnings jumped 2.4%, the highest in almost three years. Whilst that does mean a few very welcome extra pennies in our pockets, good news for workers is likely to be viewed as bad news by market watchers.
“Getting inflation down to 2% is only one part of the task the Bank of England is facing. The harder bit will be keeping it down as the impact of those huge energy shocks we felt last year finally wash through the system.
“Every extra penny we feel confident to spend has the potential to add a little bit more kindling to the smouldering inflation pyre and looking at rate cut expectation following the release of today’s figures, it’s a coin toss as to whether the temperature will reach just the right level by 20 June.
“What we can see is that the post-pandemic labour boom is well and truly over. Though vacancy numbers are still above pre-Covid levels, they are steadfastly ebbing away as positions are filled or businesses re-write their plans. And the conundrum of a stubbornly high economic inactivity rate remains.
“Long NHS waiting lists, caring responsibilities or a lack of desirable skills are vastly different problems requiring difficult solutions. Will an impending election help or hinder the work to find answers?”
