Forex▲ Bullish
UK Jobless Rate Steady at 4.9%; Pay Growth Diverges
UK ILO unemployment rate held at 4.9% in May, in line with expectations, while regular pay growth slowed to 3.4%, adding to mixed signals for the BOE.
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UK unemployment held steady at 4.9% in May, matching expectations. The labour market showed signs of gradual softening without alarming the Bank of England.
The figures come from the Labour Force Survey, which the ONS has flagged for data quality issues due to a delayed survey transition. Payrolls dipped again in June, dropping by 71,000 so far this year.
Pay growth presented a mixed picture. Total pay including bonuses remained above 4%. Regular pay growth slowed to 3.4%, continuing a decline since January. In real terms, total pay rose 1.1% after a low of 0.6% in the three months to February. Regular real pay growth stayed subdued at 0.3%.
The combination of steady unemployment and cooling wage pressures suggests the labour market is loosening, though not at a pace that would force the BOE to act urgently, analysts said. The central bank's next policy meeting is on August 1.
Energy prices have rebounded amid renewed US-Iran tensions, adding a fresh upside risk to the inflation outlook that the BOE will weigh alongside the labour data.