UK Unemployment Rate Climbs to 4.3% as Wage Growth Remains High
London – The United Kingdom’s unemployment rate rose slightly to 4.3 percent in the three months leading up to the end of July, according to official data released on Tuesday. The Office for National Statistics reported that the unemployment rate had previously been 4.2 percent in the quarter ending in June.
While the increase in the unemployment rate may cause concern, there is a positive aspect to the data. Average regular earnings growth, excluding bonuses, remained at a record high of 7.8 percent during the same period. This surge in wages is partly attributed to one-off payments made to public sector workers.
Reacting to the latest figures, Finance Minister Jeremy Hunt acknowledged the high wage growth but emphasized the importance of sticking to the plan to halve inflation in order to sustainably increase real wages. Prime Minister Rishi Sunak had previously expressed his hope to halve the UK’s annual inflation rate, which currently stands at 6.8 percent and is the highest among the Group of Seven nations.
Ashley Webb, a UK economist at the Capital Economics research group, highlighted that the labor market had shown signs of easing in July. However, the strong wage growth may cause unease at the Bank of England. Webb believes that this could lead to an increase in interest rates, with the Bank potentially raising rates from the current 5.25 percent to a peak of 5.5 percent at its upcoming policy meeting.
The latest data presents a mixed picture of the UK’s economic landscape. While the rise in unemployment is a cause for concern, the high wage growth provides some relief. As the country continues to navigate the challenges of the ongoing pandemic, policymakers will need to carefully consider the best strategies to ensure sustainable economic growth and support the workforce.
More detail via The Manila times here… ( Image via The Manila times )
