Unemployment in United Kingdom

United Kingdom Unemployment | Economic News & Forecasts

United Kingdom - Unemployment

Unemployment rate dips in the first quarter, but wage growth slips

In the January-March period, the unemployment rate fell to a new multi-decade low of 3.8%, while the employment rate was the joint-highest on record. That said, employment growth came in below market expectations at 99,000—potentially a sign of Brexit uncertainty weighing on hiring decisions—while nominal earnings growth excluding bonuses dipped for the second consecutive rolling quarter.

Looking ahead, despite the recent drop-off, nominal wage growth should continue to comfortably outpace inflation. In its May Inflation Report, the Bank of England penciled in 3% growth in total pay for 2019. Coupled with low unemployment, this should support private consumption.

James Smith, an economist at ING, sounds a note of caution: “there are some early warning signs emerging from the jobs market. Employment growth has slowed since the start of the year, which tallies with various survey indicators that have hinted at reduced appetite to hire […]. Meanwhile, the number of people on the unemployed claimant count has been gradually rising.”

Our panelists currently see the unemployment rate averaging 4.1% in 2019 and 4.3% in 2020, while real disposable income is seen increasing 1.5% in both 2019 and 2020. A new Consensus Forecast will be published on 28 May.

United Kingdom - Unemployment Data

2013  2014  2015  2016  2017  
Unemployment (% of active population)7.6  6.2  5.4  4.9  4.4  

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United Kingdom Unemployment Chart

United Kingdom Unemployment
Note: Unemployment in % of active population.
Source: Office for National Statistics (ONS).

United Kingdom Facts

Bond Yield1.11-3.04 %May 13
Exchange Rate1.30-0.35 %May 13
Stock Market7,164-0.26 %May 13

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