Unemployment in the UK has unexpectedly fallen to 4.9%, but experts warn that 'a small fall does not suddenly mean the labour market is strong again'.
Unemployment Rate Dips to 4.9%
The rate stood at 4.9% in the three months to April, down from 5% in the previous quarter, according to the Office for National Statistics (ONS). This decline comes ahead of the Bank of England's base rate decision, expected to remain at 3.75%.
Wage Growth Shows Mixed Signals
Annual wage growth, excluding bonuses, was 3.4% in the same period. However, average earnings including bonuses climbed by 4.4%, unchanged from the previous quarter. The estimated UK economic inactivity rate also rose by 0.3% to 21%.
Expert Reactions
ONS director of economic statistics Liz McKeown said: 'The labour market remained broadly stable in the latest quarter, with further softening evident in some measures. Payroll numbers continued to fall, with new recruits at their lowest level in five years, but overall employment was little changed.'
Lukas Kaminskis, CEO of EdTech platform Turing College, commented: 'A fall in unemployment is encouraging, although the labour market remains difficult to read. Employers are still holding onto staff and hiring where needed, despite economic uncertainty. Wage growth remains positive, indicating competition for skilled workers persists.'
Nouran Moustafa, Practice Principal at Roxton Wealth, added: 'A small fall from 5% to 4.9% does not suddenly mean the labour market is strong again. It tells me the jobs market is cooling, but not falling off a cliff. For the Bank of England, this data gives a little comfort but not enough confidence to turn dovish.'
