UK unemployment rate, wages increase

LONDON

U.K. unemployment rose back to four percent in the three months to the end of May, official data showed yesterday, as the economy struggles with stubbornly-high inflation.

The unemployment rate increased from 3.8 percent in the three months to the end of April, the Office for National Statistics (ONS) said in a statement.

The rate was back at four percent for the first time since the start of 2022. 

The ONS added that pay excluding bonuses had risen at record levels.

"Due to high inflation, however, the real value of weekly earnings are still falling, although now at its slowest rate since the end of 2021," noted Darren Morgan, director of economic statistics at the ONS.

U.K. annual inflation has eased in recent months but remains close to nine percent.

This is far above the Bank of England's two-percent target, triggering numerous interest-rate hikes from the central bank.

"UK inflation is already running far hotter than policymakers had hoped, and price pressures will struggle to abate any time soon so long as earnings continue to grow at the current scorching pace," said Matthew Ryan, head of market strategy at Ebury.

The ONS revealed that average regular pay, not including bonuses, was 7.3-percent higher in the three months to May compared with the same period one year earlier.