UK Jobless Rate Rises Unexpectedly, Wage Growth Steady

UK workers

In an unexpected rise, UK's rate of unemployment has risen from 4.3 per cent to 4.4 per cent for the three months to the end of December 2017.

There were 1.47 million unemployed Brits in the final quarter of 2017, an increase of 46,000 from July to September previous year.

The employment rate between October and December 2017 was 75.2%, slightly down from the 75.3% recorded in the three months to November. "This change is within the LFS error margin". Much of the national rise was due to big hikes in the jobless figures in Wales and the East of England.

"However, while pay growth appears to be perking up, there are other signs that the labour market is starting to cool", he said, with the unemployment rate rising and the number of unemployed rising for a third successive month, though this was linked to fewer people seeking employment, rather than redundancies.

As a result of the increase, the unemployment rate on a quarterly basis ticked up for the first time since February 2016, albeit by a modest 0.1 percentage point to a still historically low level of 4.4 percent.

The ONS said workers' total earnings, including bonuses, rose by an annual 2.5 percent in the three months to December, as expected and unchanged from the three months to November.

However, the claimant count fell by 7,200 last month to 823,000, said the Office for National Statistics.

Unemployment rates are calculated by people who are registered looking for work as a proportion of the working age population.

The figures from the Office for National Statistics (ONS) sent the pound a cent lower against the U.S. dollar to just over $1.39.

"Rising employment this past year was largely driven by United Kingdom nationals" as fewer eastern Europeans and non-EU nationals were working than a year earlier, ONS statistician Matt Hughes said.

Pay growth also improved - with average weekly earnings, excluding bonuses, up by 2.5%.

With consumer price inflation at 3.0%, the stubbornly low wage growth means household real incomes continue be squeezed.

Meanwhile, growth in the number of EU nationals working in Britain slowed and the number of eastern European workers fell.

Chris Williamson, chief business economist at IHS Markit, said the labour market update contained "mixed messages" for Bank of England rate-setters.

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