Unemployment rate unchanged as wage growth slows

(Sharecast News) - The unemployment rate was largely unchanged in January, official data showed on Thursday, while wage growth continued to slow. According to the Office for National Statistics, the rate rose by 0.1 percentage point in November to January, to 5.2%, a five-year high.

The employment rate ticked up 0.2 percentage points, to 75.1%, while the economic inactivity rate was 0.3 percentage points lower at 20.7%.

Growth in average earnings including bonuses, meanwhile, slowed to 3.9% over the same period, from 4.2%, in line with expectations. Stripping out bonuses, wages rose by 3.8%, the lowest rate in more than five years.

Driving the growth in pay was the public sector, which saw average regular earnings growth of 5.9%. The private sector saw a 3.3% rise.

Liz McKeown, director of economic statistics at the ONS, said: "Labour market conditions were little changed at the start of the year.

"Unemployment remains at the rate reported last month...while the number of vacancies remains largely stable, with declines among smaller firms being offset by rises among larger ones."

The Bank of England meets later on Thursday to decide interest rates. A cut had been widely forecast, on the back of easing inflation and stagnant economic growth. However, following the outbreak of war in the Middle East, most now expect the cost of borrowing to be left on hold at 3.75%, with some analysts predicting rates could even rise this year.