Rachel Reeves is under fresh pressure as new figures reveal a stagnant labour market, with slowing wage growth and no improvement in the UK’s unemployment rate.
The figures suggest the jobs market is stagnating as the UK faces weak growth and global uncertainty.
UK unemployment held steady at 4.4 per cent in the three months to February, while wage growth showed signs of slowing, according to new data from the Office for National Statistics (ONS).
Average weekly earnings rose by 5.6 per cent — the same pace as the previous period and slightly below the 5.8 per cent growth economists had forecast.
After accounting for inflation, regular pay increased by just 2.8 per cent, showing earnings are still rising in real terms but at a slower pace.
The figures highlight growing concerns over the health of the UK labour market and the strength of the wider economic recovery.
ChancRachel Reeves faces jobs pressure as unemployment remains stagnant
Parliament TV
The number of UK job vacancies fell by 22,000, pushing total vacancies below pre-pandemic levels.
At the same time, the number of payrolled employees dropped by 78,000 in March, signalling a clear slowdown in employment growth.
Economists warn that upcoming tax changes could place further strain on the labour market, especially in lower-wage sectors.
The changes include higher National Insurance contributions and an increase to the National Living Wage from April.
The number of UK job vacancies fell by 22,000, pushing total vacancies below pre-pandemic levels
GBNEWS
Both average weekly earnings and regular wages excluding bonuses came in lower than expected, offering some relief to interest rate setters at the Bank of England and potentially paving the way for deeper cuts to borrowing costs.
Regular pay, which excludes bonuses, grew by 5.9 per cent — still well above the rate of inflation, but short of forecasts.
Economists surveyed by Reuters had predicted average weekly earnings to climb by 5.7 per cent and regular wages to exceed six per cent.
These developments pose fresh challenges for Chancellor Rachel Reeves as the government grapples with the combined pressures of inflation, weak economic growth, and rising global uncertainty.
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