Key insights
- UK unemployment fell to 4.9% in February, with wage growth rising to 3.6%. However, the ONS attributes the decline to fewer people seeking work, not increased hiring. Middle East tensions are cited as a potential headwind for future hiring, posing a slight bearish signal for global markets, including the US, due to potential economic contagion.
Investing.com -- The UK’s unemployment rate fell to 4.9% in the three months through February, down from 5.2% in the previous three-month period, according to data released Tuesday by the Office for National Statistics.
The February rate marked the lowest level since the three months ending in August 2025. Annual wage growth, excluding bonuses, reached 3.6%, up from 3.5% in the prior period.
Economists polled by The Wall Street Journal had expected the unemployment rate to remain at 5.2% with wage growth at 3.5%.
The ONS said the decline in unemployment was driven by a rise in the number of people who stopped looking for work, rather than an increase in hiring. The agency noted that fewer students were seeking work alongside their studies.
The conflict in the Middle East is raising pressure on firms to reduce hiring or cut jobs, according to the ONS.