Wage growth stumbled and the number of people out of work jumped in the three months to February 2016, according to numbers released by the Office for National Statistics (ONS) this morning, in a sign that the UK labour market could be losing steam.
Pay packets grew by 1.8 per cent compared to last year – the slowest rate of increase since January 2015, down from 2.1 per cent last month and the dizzying heights of three per cent at the end of 2015.
On a month by month basis, average weekly earnings, which came in at £491, were their lowest in ten months.
In a further sign of a possible slowdown in the jobs market, the number of people out of work jumped by 21,000 and vacancies across the economy fell for the first time since June 2015.
A growing labour force meant that the headline unemployment rate held steady at 5.1 per cent as the absolute number of people in work also grew by 20,000.
|Unemployment||Increased by 21,000||First since May 2015|
|Wage growth (annual increase)||1.8 per cent||Slowest since January 2015|
|Average weekly earnings||£491||Lowest since June 2015|
|Vacancies||Down by 0.1 per cent||First fall since June 2015|
"Today’s UK labour market data added to recent signs that the economy slowed at the start of 2016," Scott Bowman, UK economist at Capital Economics said.
Howard Archer, chief economist at IHS Global said the figures were a "double whammy of bad news."
"The very disappointing combination of a rise in unemployment and marked fall in headline earnings growth may well fuel belief that the Bank of England’s eventual next move could well be to cut interest rates. At the very least, the data will reinforce belief that any interest rate hike by the Bank of England is completely off the table for the time being," he added.
In total, there were 31.41 million people in work over the period – an employment rate of 74.1 per cent, the joint highest on record and unchanged from last month.