Wage growth in the UK has slowed to its weakest level since November, while unemployment has crept higher, as businesses brace for a series of cost pressures including tax hikes and a rise in the national minimum wage.
According to new data from the Office for National Statistics (ONS), regular pay excluding bonuses rose by 5.6% in the three months to March — down from 5.9% in the previous period and below analysts’ expectations of 5.7%. Including bonuses, total pay increased by 5.5%.
Salaries in the private and public sectors rose by 5.6% and 5.5% respectively, marking the twenty-second consecutive quarter in which wage growth outpaced inflation, which stood at 2.6%.
Meanwhile, the UK’s unemployment rate ticked up to 4.5%, from 4.4% previously. Data from HM Revenue & Customs also showed a decline of 106,000 in the number of payrolled employees compared to a year earlier, bringing the total to 30.3 million — a 0.3% annual fall.
Job vacancies continued to fall, dropping by 42,000 to 761,000 in the latest quarter — well below the peak of 1.3 million seen in early 2022. However, the economic inactivity rate — representing those neither in work nor seeking employment — edged down by 0.2 percentage points to 21.4%.
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