UNEMPLOYMENT IN THE UK FALLS TO 4.9%-Pay growth drops to the lowest in five years 

Unemployment in the UK unexpectedly fell in the three months to February, according to official figures – but the fallout from the conflict in the Middle East is expected to cause a rise in job cuts.

The Office for National Statistics (ONS) said that the rate of unemployment was 4.9% in the three months to February, the lowest level since last summer. This compares with 5.2% in the three months to January, a rate that economists had expected to also see in February.

Excluding bonuses, wage growth fell to 3.6% year on year in the three months to February, down from 3.8% in January and the lowest level since November 2020. The fall was slightly less than a drop to 3.5% that City economists had expected.

Wages increased by 3.8%, including bonuses,  slowing from a rise of 4.1% in the previous quarter. However, more up-to-date tax figures released by the ONS showed the number of employees on payrolls fell by 11,000 in March to 30.3 million.

The number of job vacancies declined from 721,000 in the three months to February to 711,000 in March. Private sector pay growth also slowed from 3.3% to 3.2%, which the Bank of England has previously said would be consistent with its target of getting inflation to 2%. The rate of inflation in March will be released by the ONS on Wednesday.