Unemployment rate in the United Kingdom fell 4,9% over three months to February, compared with 5.2% recorded in the previous three‑month period.
New data from the UK labour market
As ING Think analysts emphasize, the above decline likely does not result from a significant increase in the number of people who took up employment during the analysed period.
"In the last quarter employment changed only slightly. Detailed data show that the decline in the unemployment rate is almost entirely due to an increase in occupational inactivity, i.e. the number of people who neither work nor actively seek work," the report reads.
"The Office for National Statistics points out that this phenomenon was particularly visible among students. Care should be taken when interpreting this data, but the most important point is that the decline in unemployment is not necessarily such good news, as it might appear at first glance," added the report.
Data from the Office for National Statistics show that from December to February wage growth was 3.6% year‑on‑year, the lowest figure since the end of 2020.
"Is the UK labour market at a turning point? It may be tempting to look at the relatively sharp decline in unemployment over three months to February and conclude that the answer is yes," economists said.
Experts stress that most data published by the ONS were collected before the outbreak of war in the Middle East following the US and Israeli attack on Iran at the end of February.
At the same time they point out that sustained high energy prices may negatively affect the labour market in the coming months.
"Higher oil prices will probably again put pressure on unemployment growth," it was stated.
"Overall, today's report reminds us that the UK labour market is entering the current energy crisis in an unstable state and, most importantly, is much weaker than in February 2022, when the last shock related to oil and natural gas prices occurred," added the report.
Analysts forecast that the Bank of England will not decide to raise interest rates this year and will keep the main rate at 3,75%.
Source: Trading Economics.
Read also: Break in the UK labour market. Companies are preparing for mass layoffs
See also: Pound exchange rate reacts to new data! Inflation surprised the British
Pound exchange rate on Tuesday, 21 April
The pound to zloty rate on Tuesday, 21 April is at 4,85 PLN.
Over the last month the rate fell by 1.56%.
Chart. Pound to zloty (GBP/PLN)
Source: TradingView.
The euro to pound rate reaches 0,87 GBP.
ING Think forecast assumes a gradual strengthening of the rate to 0,88 GBP over three months, 0,89 GBP after six months and 0,90 GBP over twelve months.
Chart. Euro to pound (EUR/GBP)
Source: TradingView.
The pound to dollar rate hovers around 1,35 USD.
Economists forecast that the rate will fall to 1,34 USD within a month, then drop to 1,33 USD and remain there for the next year.
Chart. Pound to dollar (GBP/USD)
Source: TradingView.
Read also: Will the dollar return to 4 PLN? The land invasion of Iran still poses a threat. Expert: "Unlikely, but still potentially possible"
See also: Dollar rate before the "nervous and dynamic" move, euro waiting to fall? Expert issued forecast for USD/PLN and EUR/USD
