LONDON (Reuters) -Britain’s unemployment rate rose unexpectedly in the three months to February but pay growth stayed higher than forecast, highlighting the dilemma for the Bank of England as it judges whether to raise interest rates further.
The Office for National Statistics said the unemployment rate rose to 3.8% – its highest since the second quarter of 2022 – rather than holding at 3.7%, as forecast by economists in a Reuters poll.
Annual pay growth for the three months to January was revised up to 5.9% and held at that level for the three months to February – well above the forecast of 5.1% in the Reuters poll. Excluding bonuses, wage growth held at 6.6%.
“Pay continues to grow more slowly than prices, so earnings are still falling in real terms, although the gap between public and private sector earnings growth continues to narrow,” ONS statistician Darren Morgan said.
(Reporting by David Milliken and Sachin Ravikumar, Editing by William Schomberg)
