UK wage growth slows sharply as unemployment holds steady

Wage growth slowed sharply in the three months to January according to the latest snapshot of the jobs market from the Office for National Statistics.Average earnings fell to 3.8% in the three months to January, from 4.2%, which was a larger fall than forecast by City economists. It was the slowest rate of wage growth in more than five years.The unemployment rate was unchanged at 5.2%.Liz McKeown, the director of economic statistics at the ONS, said: “Labour market conditions were little changed at the start of the year. The number of workers on payroll rose slightly in the latest month but, overall, the recent picture has been broadly flat.“Unemployment remains at the rate reported last month, up on the quarter and the year, while the number of vacancies remains largely stable, with declines among smaller firms being offset by rises among larger ones.“Regular wage growth is at its lowest rate in more than five years, with pay growth in both the private and public sectors continuing to ease.”The slowdown in wage growth is unlikely to sway Bank of England policymakers, who meet later today and are expected to leave interest rates on hold at 3.75% amid the Middle East conflict and a steep rise in oil prices.Pay surveys have shown a drop in pay awards over the past year across the private and public sectors.Before the war on Iran, central bank policymakers were expected to cut interest rates to prevent the economy from sliding into recession, but concerns about a rise in inflation caused by higher oil prices was expected to stay their hand.On Wednesday the US Federal Reserve held interest rates at a range of 3.5% to 3.75%, resisting pressure from Donald Trump to lower them.