UK's unemployment rate stood at 5.1 per cent at the end of last year, official data released on Tuesday showed, as companies reduced staff amid uncertainty over the budget.
The rate for the three months to the end of November, a near five-year high, was unchanged from the previous quarter ending October 31, according to a statement from the Office for National Statistics (ONS).
The reading, which was in line with analyst expectations, covered the period before the Labour government’s budget in late November, when businesses cut staff ahead of expected tax rises. Tuesday’s data also included an update on wages.
ONS director of economic statistics Liz McKeown said that during the period, “wage growth in the private sector has slowed to its lowest rate in five years, while public sector wage growth remains elevated”.
More recent data on UK inflation is due on Wednesday, with official figures for December.
Along with the unemployment figures and some recent positive signals on economic growth, the consumer prices inflation (CPI) data will be used by the Bank of England to assess its next steps on interest rates.
The unemployment data “suggests that the next policy meeting in February may be too soon for another interest rate cut”, said Ashley Webb, UK economist at Capital Economics research group.
However, if December’s CPI inflation figures are much weaker than the Bank expects, “it’s possible the door for a February rate cut is pushed ajar”, he said.
