Britain’s labour market showed unexpected resilience in the three months to April, with wage growth remaining stronger than forecast and unemployment edging lower, according to data released by the Office for National Statistics (ONS). Regular pay excluding bonuses held steady at an annual rate of 3.4%, surpassing economists’ expectations of a slowdown to 3.2%. Meanwhile, the unemployment rate fell to 4.9% from 5.0%, offering a slightly brighter picture of the job market ahead of the Bank of England’s interest rate announcement.
The latest figures come as policymakers assess whether rising global energy prices and ongoing geopolitical tensions could fuel higher wage demands and inflationary pressures. Although the Bank of England is widely expected to keep interest rates unchanged at 3.75%, stronger-than-expected wage data may encourage some members of the Monetary Policy Committee to favour a tighter policy stance. However, economists note that the broader trend still points to a cooling labour market compared with a year ago, with hiring activity weakening and businesses facing higher employment costs.
Despite the positive headline figures, underlying indicators suggest continued challenges. Job vacancies fell to 707,000 in the three months to May, the lowest level since early 2021, while youth unemployment remained elevated at 16.2%. Business groups have warned that rising costs and subdued demand could lead to higher unemployment later this year. Private-sector wage growth excluding bonuses also slowed to 2.9%, its weakest pace since late 2020, indicating that labour market pressures may be easing despite the latest upbeat data.
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