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London - The UK labour market showed signs of resilience in the face of the referendum on European Union (EU) membership as unemployment unexpectedly fell and wage growth accelerated.
The jobless rate declined to 5% in the three months through April, the lowest since 2005, the Office for National Statistics in London said on Wednesday. Economists in a Bloomberg survey had expected the rate to stay at 5.1%. The number of people in work rose by 55 000 to a record 31.6 million.
Pay pressures also ticked higher. Basic wage growth accelerated to 2.3% from 2.2% in the first quarter, instead of easing as economists forecast. In April alone, the rate rose to 2.5% from 1.9% in March, partly reflecting the introduction of a higher minimum wage.
“The solid labour-market figures should allay fears that uncertainty ahead of the referendum has significantly weighed on the economy in the second quarter,” said Ruth Miller, an economist at Capital Economics in London. “If this continues, and the UK votes to stay in the EU, a rate hike might come back on the agenda before too long.”
BoE decision
The pound extended gains against the dollar after the data. The currency was at $1.4191 as of 11:06, up 0.6% on the day.
The data come as Bank of England policy makers prepare to announce their monthly interest-rate decision on Thursday. Barring a vote to leave the EU, economists expect the BOE to raise its benchmark rate from a record-low 0.5% in the first half of next year, according to a Bloomberg survey.
Unemployment fell by 20 000 to 1.67 million in the latest three months. In April alone, the jobless rate declined to 4.8%, the lowest since September 2005. Jobless benefits, a narrower measure of unemployment, fell 400 in May and the rate was unchanged at 2.2%. In April, claims rose 6 400 instead of the 2 400 fall previously estimated.
Wage growth including bonuses in the three months through April was unchanged at 2%, a faster pace than forecast. April saw pay growth accelerate to 2.5% from 2%, with the new National Living Wage being most keenly felt in the retail sector, the ONS said.
EU vote
While employers continued to add jobs as the June 23 EU referendum draws closer, the pace of improvement has slowed, suggesting some hiring and investment is being put on hold pending the too-hard-to-call vote. In the three months through January, the number of people in work rose by 118 000.
The fall in unemployment also partly reflected a slowdown in participation, with the number of people declared economically active rising just 36 000 in the latest period. Vacancies fell 9 000 between March and May to 749 000.
Separate figures showed employment in central and local government rose 1 000 in the first quarter to 5.17 million, reflecting increased payrolls in the National Health Service.
