UK unemployment rate steady, wage growth remains 'relatively strong'

(Sharecast News) - The UK unemployment rate was unchanged in January, while wage growth slowed slightly but remained "relatively strong", according to figures released on Thursday by the Office for National Statistics. The unemployment rate came in at 4.4%, unchanged from December.

Regular pay excluding bonuses rose 5.9% in the three months to January, the same as a month earlier and remaining at the highest level since the three months to April last year.

Meanwhile, total pay including bonuses was up 5.8%, down from 6.1% a month earlier and versus expectations for a smaller decline to 5.9%

ONS director of economic statistics Liz McKeown said: "Overall pay growth remains relatively strong, with pay growth high in both the public and private sectors, despite the latter slowing slightly in the latest period.

"The wider labour market picture is relatively unchanged, with the number of employees on payroll broadly flat in the latest period and with little growth seen over much of the last year.

"Unemployment, as measured by the Labour Force Survey, and the Claimant Count have both increased slightly in the latest periods, though caution continues to be advised with the survey estimates.

"Initial estimates show that the number of vacancies is little changed on the previous quarter, remaining just above pre-pandemic levels."

Ruth Gregory, deputy chief UK economist at Capital Economics, said: "With the labour market cooling rather than collapsing and wage growth stuck in the 5.5-6.0% range, we doubt the Bank of England will cut interest rates from 4.50% today.

"The next cut will probably be in May and, ultimately, we think rates will be cut further than most expect."