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UK unemployment was steady in the three months to February, data from the Office for National Statistics showed Tuesday, and have even improved from the pre-pandemic figure.
The ILO unemployment rate for the three months to February was 3.8%, 0.2 percentage points lower than the previous three-month period, and 0.1 percentage points below pre-coronavirus pandemic levels.
Market forecasts - according to FXStreet - had predicted unemployment at 3.9%.
‘The latest Labour Force Survey estimates for December 2021 to February 2022 show the employment rate is unchanged on the quarter, while the unemployment rate decreased. Over the same period, the economic inactivity rate has increased slightly,’ the ONS explained.
Capital Economics Senior UK Economist Ruth Gregory said the latest batch of data shows ‘signs of a softening’ in labour demand, but the labour market ‘remains tight’.
‘So, even though real wages are now falling and will decline further, we still expect the Bank of England to raise interest rates from 0.75% to 1.00% on May 5 and to 2.00% next year,’ she added.
The UK employment rate was largely unchanged on the quarter at 75.5%, but still below pre-coronavirus pandemic levels.
Gregory continued: ‘Labour demand was a bit weaker than we expected at the start of the year. Admittedly, LFS employment still increased by 10,000 in the three months to February - consensus forecast was for 53,000 - up from negative 13,000 in January. But the single month data showed that in February itself employment fell by 89,000.’
The economic inactivity rate increased by 0.2 percentage points to 21.4%.
‘This increase was driven by those who are economically inactive because they are looking after family or home, retired, or long-term sick,’ the ONS said.
The number of job vacancies in January to March 2022 rose to a new record of 1,288,000.
The ONS added: ‘However, the rate of growth in vacancies continued to slow down. Over the quarter the number of vacancies increased by 50,200 with the largest increase in human health and social work.’
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