The number of people out of work grew for the first time in a year
Hopes that the Bank of England will cut interest rates next month and give borrowers some much-needed breathing room have been 'dented' after the release of official unemployment statistics - which shows joblessness has reached its highest point in the last year, increasing from 4.2 to 4.3 per cent.
Industry experts suggest that the Bank will scrutinise the next set of employment figures carefully, especially considering last month's near 10 per cent increase in the National Living Wage. It is also likely to seek further progress towards its target in the forthcoming April inflation data. Fresh data from HM Revenue & Customs, showing more recent trends, estimates a fall by 85,000 to 30.2 million in April in the number of UK workers on payrolls - marking it as the most significant drop since May 2020. However, the ONS has indicated that these figures may be revised.
These facts follow up on official figures disclosed last week, which revealed that the UK had escaped a brief and mild recession, with the GDP rising by 0.6 per cent in the first quarter of the year. Rob Wood from Pantheon Macroeconomics shared his view that a rate cut in June is still "on track" despite the robust wages growth. "That said, strong wage growth will likely stop the Monetary Policy Committee cutting bank rates quickly," he added.
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