Skip to content 
Search

Latest Stories

UK unemployment hits 48-year low but inflation squeezes pay

UK unemployment hits 48-year low but inflation squeezes pay

BRITAIN'S unemployment rate fell to its lowest since 1974 in the first three months of this year, but soaring inflation led to the biggest annual fall in real earnings for most workers since 2013, official figures showed on Tuesday (17).

The jobless rate dropped to 3.7 per cent from 3.8 per cent - below forecasts in a Reuters poll for it to hold steady - and the number of people out of work was less than job vacancies on offer for the first time on record.

"Despite a slowdown in growth this March, the UK's labour market remains red-hot with record vacancies and job-to-job moves," the Confederation of British Industry's director for people and skills, Matthew Percival, said.

The Bank of England is watching the strength of Britain's labour market warily, as it fears that higher-than-normal pay growth is a key channel through which the current energy-driven surge in inflation might become entrenched.

Consumer price inflation was 7.0 per cent in March and official figures due on Wednesday (18) are expected to show it hit 9.1 per cent in April when a 54 per cent rise in energy tariffs took effect.

The BoE expects further price rises will push the economy close to recession by the end of the year, pushing up unemployment.

Tuesday's data showed soaring pay in some sectors - with total pay up a record 9.9 per cent in March alone - but the rewards from a tight labour market are unevenly distributed.

Bankers and builders are doing especially well, while public-sector workers face the biggest pay squeeze.

Total pay in the first quarter was up 7.0 per cent on a year earlier, far above economists' average forecast of a 5.4 per cent rise as companies resorted to bonuses to attract or keep staff. Regular pay rose only slightly more than expected, up 4.2 per cent.

Adjusted for inflation, basic pay was 2.0 per cent lower than a year ago, the biggest fall since the three months to September 2013.

Governor Andrew Bailey has said a fall in living standards is inevitable due to the energy price shock, and that a widespread push for higher pay would disproportionately benefit workers who were already in a strong position in the job market.

The uneven nature of wage gains should give the BoE pause for thought about raising interest rates, which financial markets expect to reach 2.0-2.25 per cent by the end of the year, Pantheon Macroeconomics's Samuel Tombs said.

"These numbers shouldn't make the MPC panic about wage growth," he said.

The labour market strength comes despite the economy stagnating in February and March.

The number of people in work rose by 83,000 in the first quarter of the year but is 444,000 below its level before the Covid-19 pandemic, largely reflecting increased long-term sickness and early retirement.

However, Tuesday's data brought tentative signs this may be starting to reverse, with the largest number of people moving from 'inactivity' to work since these records began in 2001.

(Reuters)

More For You

LET Mining: The world's leading cloud mining platform, the best way to earn passive income

LET Mining: The world's leading cloud mining platform, the best way to earn passive income

Today, as the digital economy continues to evolve, passive income is no longer a wealth tool exclusive to the rich, but something that everyone can touch and participate in. With the integration of blockchain technology and green energy, LET Mining is providing global users with a new way of passive income: no operation, zero technical threshold, and daily income.

What is LET Mining?

LET Mining is an innovative cloud mining service platform that simplifies the complex cryptocurrency mining process into a few simple steps through cloud computing technology, allowing ordinary users to easily participate in digital currency mining and obtain stable passive income without purchasing expensive hardware equipment or mastering professional technical knowledge.

Keep ReadingShow less
JLR Tata

A logo is pictured outside a Jaguar Land Rover new car show room in Tonbridge, south east England.

JLR Q1 sales dip as US tariffs hit exports

Jaguar Land Rover (JLR) reported a 10.7 per cent drop in sales for the April–June quarter, as a temporary pause in shipments to the United States and the phase-out of Jaguar’s legacy models weighed on volumes.

The company, owned by India’s Tata Motors, sold 87,286 units to dealers worldwide during the quarter, compared to 97,755 units in the same period last year.

Keep ReadingShow less
Bangladesh seeks US deal to shield garment industry from tariffs

Workers are engaged at their sewing stations in a garment factory in Savar, on the outskirts of Dhaka, on April 9, 2025. (Photo by MUNIR UZ ZAMAN/AFP via Getty Images)

Bangladesh seeks US deal to shield garment industry from tariffs

BANGLADESH, the world's second-biggest garment manufacturer, aims to strike a trade deal with the US before Donald Trump's punishing tariffs kick in next week, said the country's top commerce official.

Dhaka is proposing to buy Boeing planes and boost imports of US wheat, cotton and oil in a bid to reduce the trade deficit, which Trump used as the reason for imposing painful levies in his "Liberation Day" announcement.

Keep ReadingShow less
UK business district
The Canary Wharf business district including global financial institutions in London.
Getty Images

Bond yields ease following Starmer’s support for Reeves

THE COST of UK government borrowing fell on Thursday, partially reversing the rise seen after Chancellor Rachel Reeves became emotional during Prime Minister’s Questions.

The yield on 10-year government bonds dropped to 4.55 per cent, down from 4.61 per cent the previous day. The pound also recovered slightly to $1.3668 (around £1.00), though it did not regain all its earlier losses.

Keep ReadingShow less
modi-trump-getty
Modi shakes hands with Trump before a meeting at Hyderabad House in New Delhi on February 25, 2020. (Photo: Getty Images)
Getty Images

Indian exporters watch closely as Trump says trade deal with India likely

THE US could reach a trade deal with India that would help American companies compete more easily in the Indian market and reduce tariff rates, President Donald Trump said on Tuesday. However, he cast doubt on a similar deal with Japan.

Speaking to reporters on Air Force One, Trump said he believed India was ready to lower trade barriers, potentially paving the way for an agreement that would avoid the 26 per cent tariff rate he had announced on April 2 and paused until July 9.

Keep ReadingShow less