UK economy wins wages boost, unemployment dips

Britons are earning more than inflation is eroding the value of their wages, according to the latest data
AFP

London (AFP) – Britain’s economy has won a lift with wage growth outpacing inflation for the first time in a year and the unemployment rate remaining at a 43-year low, data showed Tuesday. 

The official jobless rate stood at 4.2 percent in the three months to the end of February, the Office for National Statistics (ONS) said in a statement.

That was slightly down from 4.3 percent in the quarter through to the end of January.

“Latest estimates… show that the number of unemployed people in the UK fell by 16,000, leading to a fall of the unemployment rate by 0.1 percentage points,” the ONS said.

Analysts said Tuesday’s data, showing also that average wages grew by 2.8 percent in the reporting period, increased the likelihood of an interest rate hike by the Bank of England next month.

“Wages are now rising ever so slightly faster than inflation –- which on the face of it, implies that the household squeeze has come to an end,” noted ING economist James Smith. 

He cautioned however that a further rate hike in late 2018 remained uncertain owing to uncertainty surrounding Brexit talks.

Britain’s annual inflation rate stood at 2.7 percent in February. The March reading is scheduled for publication on Wednesday.

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