The UK unemployment rate fell below pre-pandemic levels for the first time in two years with wage growth rising faster than expected in January.
According to a report released by the Office for National Statistics (ONS), the UK unemployment rate fell to 3.9% in the three months to January. There was a 275,000 increase in jobs in February, more than double market expectations.
These published figures add evidence to the UK’s strong recovery from Covid-19 before the war in Ukraine posed new uncertainties to the country’s economy.
It also indirectly reinforces expectations that the Bank of England (BOE) will raise its interest rates again at a policy meeting this week.
Meanwhile, employment data also showed average wages excluding bonuses increased 4.8% from the previous year, higher than market expectations for a 4.6% increase.
Although the data showed a strengthening, the pound failed to capitalize on it by continuing to trade weak at its lowest level since November 2020 against the strong USD.