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2026-02-17 15:18:10
[A Chill in the UK Job Market, Fueling Expectations of Interest Rate Cuts?] ⑴ New labor market data released on Tuesday showed a slowdown in UK wage growth and a slight increase in the unemployment rate. Specifically, in the last three months of 2025, the UK's average weekly earnings, excluding bonuses, grew at an annual rate of 4.2%, in line with market expectations but lower than the 4.4% increase in the three months to November. ⑵ In the three months to December, the UK's unemployment rate, calculated according to ILO standards, was 5.2%, in line with economists' expectations but up from the previous 5.1%. Employment increased by 52,000 during the same period, far below the market expectation of 94,000, indicating weakening momentum in the job market. ⑶ Furthermore, the number of people claiming unemployment benefits in the UK increased by 28,600 in January compared to the previous month, further confirming the cooling of the labor market. The combination of slowing wage growth and rising unemployment may provide the Bank of England with more policy space for further interest rate cuts. The market will focus on future data to assess the extent of the economic slowdown and the central bank's possible response.
