UK unemployment rate drops to 4.9%, wages growth slowest since 2020 | World News

According to the BBC, data from the Office for National Statistics showed that the UK unemployment rate unexpectedly fell to 4.9% in the three months to February, while wage growth slowed to the lowest level in more than five years.The decline comes despite expectations that interest rates will remain at 5.2%. However, the data also show an increase in economic inactivity, meaning more people are not actively looking for work and are therefore excluded from unemployment calculations.Annual wage growth was 3.6% between December and February, the lowest since late 2020, although earnings are still rising faster than inflation.The British Broadcasting Corporation (BBC) quoted Liz McKeown, director of economic statistics at the Office for National Statistics, as saying: “As the unemployment rate has fallen, the number of people not actively looking for work has also increased, and the data shows that fewer students are looking for work outside of study.”The labor market is also showing signs of weakness. Employment fell by 11,000 in March, and job openings fell to 711,000 between January and March, the lowest level in nearly five years.Much of the data predates the U.S.-Israeli conflict with Iran, which has pushed up global energy prices. Economists warn that continuing rising costs could weigh on hiring in the coming months.Yael Selfin, chief economist at KPMG UK, told the BBC that the labor market “had shown signs of stabilizing in February, but a reversal may be coming”.She added: “The decline in the unemployment rate is consistent with survey evidence that hiring activity was recovering before the conflict in the Middle East. However, the unemployment rate is likely to rise in the coming months as companies scale back hiring due to rising costs and weak demand.”The International Monetary Fund warned that the energy shock could hit the UK harder than other advanced economies and cut its growth forecast for this year to 0.8% from 1.3% previously.As a net energy importer, the UK remains particularly vulnerable to sharp price increases.Separate official data showed the economy grew 0.5% in February, suggesting momentum was building even before the latest geopolitical tensions began.