The United Kingdom (UK) grapples with a slight uptick in unemployment amidst ongoing economic challenges, as official data released on Tuesday reveals a rise in the unemployment rate and a slowdown in wage growth. These developments reinforce analysts’ expectations of a potential cut to UK interest rates shortly.
According to the Office for National Statistics (ONS), the unemployment rate increased to 3.9 percent in the three months ending January, up from 3.8 percent in the previous quarter. Additionally, average regular pay growth, excluding bonuses, dipped to 6.1 percent from 6.2 percent, highlighting a moderation in wage increases.
When factoring in Britain’s annual inflation rate, real wages saw a marginal rise of only two percent during the reporting period.
Similar to actions taken by the Federal Reserve and the European Central Bank, the Bank of England is considering a potential interest rate cut, possibly as early as June. This move comes amidst cooling inflation and previous rate hikes aimed at curbing rising prices.
Paul Dales, chief UK economist at Capital Economics, noted, “The easing in wage growth… is likely still below the Bank of England’s desired pace. However, there are indications that a more significant slowdown is imminent, paving the way for a potential interest rate cut in June.”
Meanwhile, recent reactions have emerged regarding the UK’s decision to prohibit foreign health workers and caregivers from bringing their families to the country in 2024. Secretary of State for the Home Department, James Cleverly, conveyed this announcement via a statement on the official Home Office X account on Monday.
Cleverly stated that the UK implemented the ban as part of broader efforts to reduce migration, signaling a shift in immigration policies impacting healthcare professionals and their families.