Unemployment in Britain fell below pre-pandemic levels in the quarter to January, while wages rose faster than expected, according to official figures, which could boost Bank of England plans to raise interest rates. .
The unemployment rate fell more than expected to 3.9%, despite the Omicron mutation, according to ONS data.
This is a drop from 4.1% at which the index was formed in the last quarter of 2021, and is the lowest level from the quarter until January 2020.
Job vacancies hit a new record high in the quarter to February, at 1.318 million, underscoring the workforce shortage of many employers.
“Further tightening of the labor market will simply encourage the Bank of England to raise interest rates on Thursday, despite the impending additional blow to real household incomes from the war in Ukraine,” said a chief economist at Capital Economics.
The BoE is expected to raise interest rates by a quarter, to the pre-crisis level of 0.75%, at Thursday’s meeting.
Some of its members have been concerned by BoE research on companies that showed they plan to increase wages by 5% in 2022, much more than last year.
BoE worries that high inflation caused by rising energy prices and supply problems after the coronavirus could prove to be slow to go away.
Source: Capital
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