- Capital Economics
The UK economy posted some better than expected data on the labour market, which continued on a strong footing in January. Britain's unemployment rate remained unchanged at 5.1%, the lowest level in a decade, for the third month in a row, indicating the labour market continued to tighten markedly at the beginning of the year. Despite the headline jobless rate remained steady, the number of Britons applying for unemployment allowance continued to decrease for the sixth straight month, dropping by 18,000 in February. Moreover, British wages increased more than expected in the three months to January, but remained below pre-crisis levels and are unlikely to rise sharply this year, in the light of weakening domestic economy which faces a referendum on the UK's membership of the European Union in June and a slowing global economy. Total earnings including bonuses climbed 2.1% on the year in the three months to January, compared with 1.9% in the fourth quarter and against a forecast of 2.0%.For the month of January alone wages jumped 2.5%, the biggest rise since August, after a 1.7% increase in December. At the sane time, earning without bonuses rose 2.2% in the three months to January, up from 2.0% in the prior month. The Bank of England had estimated that wage growth would be 1.75% in the fourth quarter of 2015 and rise to 3% by the end of 2016.
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