UK jobless rate holds at 3.8% as jobs boom continues

BRITAIN’S unemployment rate held at 3.8 per cent in the 3 months to May and the number of people in work rose by the most since the middle of 2021, suggesting the cost-of-living squeeze has not yet hit the labour market, official figures showed.

Economists polled by Reuters had expected the jobless rate to rise to 3.9 per cent from 3.8 per cent in the previous reading.

Tuesday’s data showed an increase of 296,000 in the number of people in employment, the biggest increase since the 3 months to August last year.

The Reuters poll had pointed to an increase of 170,000.

A fall of 144,000 people deemed to be inactive - neither in work, nor looking for it - was the biggest drop since shortly before the coronavirus pandemic hit Britain.

Growth in regular pay picked up slightly to 4.3 per cent. But growth in total pay, including bonuses, slowed to 6.2 per cent from 6.8 per cent.

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Many employers have resorted to paying bonuses to attract or retain staff amid a shortage of workers.

The Bank of England has said it is prepared to act forcefully if it sees that the recent surge in inflation - which is expected to hit 9.3 per cent in the 12 months to June in figures due on Wednesday - is becoming embedded in Britain’s economy.

The British central bank is expected to raise interest rates for the sixth time since December on Aug 4 after its next scheduled policy meeting with the size of the hike representing the only question for investors. REUTERS