The Office for National Statistics (ONS) announced on Tuesday (March 14) that Britain’s unemployment rate rose to 3.7% in the November-January period, which was slightly better than the Reuters economists’ forecast of 3.8% increase.
The Bank of England (BoE) closely monitors the increase in basic wages, which is an essential factor in deciding when to suspend interest rate hikes. However, the ONS revealed that the increase in basic wages slowed down during the November-January period.
The ONS stated that wages excluding bonuses rose 6.5%, a decrease from 6.7% in the October-December period, while all wages increased by 5.7% year-on-year during November-January.
Economists predict that basic wages and total income will increase by 6.6% and 5.7%, respectively.
The increase in unemployment rate and slow wage growth in the UK could pose challenges for the government as it tries to recover from the economic impact of the pandemic. The Bank of England is likely to keep a close eye on these developments and take necessary actions to support the country’s economic recovery.