UK Unemployment Rate Rises to 4.3%, While Earnings Remain Elevated

The UK unemployment rate rose to 4.3% in March from a prior 4.2% as tight monetary conditions are slowly having an effect on the real economy. One area where contractionary policy is not having as much of an effect is on earnings. The measure of UK wages that includes bonuses remained at 5.7% while the measure excluding bonuses remained steady at 6%. The decline in earnings growth has started to peter out, suggesting wage pressures remain.

However, the Bank of England (BoE) hinted at it’s most recent meeting that it is not looking too closely into wage dynamics as it is showing to have a diminished effect on influencing the overall level of prices in the economy.

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Cable's immediate market reaction involved a move higher, which was ultimately reversed within minutes.

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