United Kingdom: Labor market posts healthy gains in November-January period
March 21, 2018
The unemployment rate dipped to 4.3% in the November-January period from 4.4% in October-December, beating market expectations of 4.4%. On a quarter-on-quarter basis, employment surged by 168,000—double the figure analysts were expecting—on higher full-time employment, and the economic inactivity rate dipped to a multi-decade low.
Nominal wage growth continued to recover in November-January, with total pay up 2.8% year-on-year. As a result, real wages were flat, following nine consecutive rolling quarters of declines. With inflation declining as the impact of the currency depreciation fades, real wages are likely to turn positive in the coming months, easing the squeeze on household budgets. In addition, public wage growth, which is currently tracking significantly below private wage growth, could accelerate further if a recent pay settlement for 1.3 million health workers comes into force later this year.
UK Unemployment Rate Forecast
Our panelists are currently assessing the latest developments, with a new Consensus forecast to be published on 27 March.
Author: Oliver Reynolds, Economist