UK unemployment holds at five-year high ahead of rate call
LONDON: Britain's unemployment rate has remained at a five-year high, official data released on Thursday showed, ahead of an expected decision by the Bank of England to hold interest rates steady, as inflation concerns dominate the outlook.
The unemployment rate stood at 5.2% in the three months to January, while wage growth fell, the Office for National Statistics said.
British businesses warned that the economic fallout from the war in the Middle East and the rollout of AI threaten to further weaken hiring.
"There are clear signs that pressure is growing on the labour market," David Bharier, head of research at the British Chambers of Commerce, said.
"The conflict in Iran is set to drive higher inflation and weaken growth, raising the risk of stagflation," he said, noting also that greater AI efficiencies could lead firms to cut headcount.
The Bank of England is widely expected to leave borrowing costs at 3.75% later on Thursday, as surging oil and gas prices due to the Middle East war threaten to fuel inflation.
"People everywhere are struggling to find jobs, youth employment is falling faster still, and the UK faces the prospect of a jobless generation," warned Helen Dickinson, head of the British Retail Consortium.
"The loss of almost 400,000 retail jobs over the past decade is the loss of hundreds of thousands of opportunities for young people to start earning for themselves," she added.
Youth unemployment among 16 to 24-year-olds edged down slightly in the latest reported period but remained around 16%, close to 10-year highs.
