UK employment rises more than expected, ONS says

The UK added more jobs to the economy than forecast in the three months to March while wage growth unexpectedly accelerated, official data showed on Wednesday.

Employment rose 44,000 to 31.58 million quarter-on-quarter, beating expectations for no additions, the Office for National Statistics revealed.

Average weekly earnings rose an annualised 2.0% during the period, compared to analysts’ estimates for a 1.7% gain and the previous quarter’s 1.9% year-on-year increase.

Excluding bonuses, earnings grew 2.1% year-on-year in the three months to March, slowing from a previous 2.2% and less than expectations for a 2.3% rise.

The unemployment rate held at 5.1%, as expected but the number of unemployed fell 2,000 in the three months to March.

"This is a softish labour market report overall, but not as bad as feared," said Howard Archer, chief UK and European economist at IHS Global Insight.

"Overall, the labour market data will likely reinforce belief that an interest rate hike by the Bank of England is likely to remain off the table for some considerable time to come – even if there is a vote to remain in the EU in June’s referendum."

Archer highlighted that the 2.0% growth in earnings is well below the level of at least 3.0% that the Bank of England sees as consistently needed to push consumer price inflation up towards its 2.0% target level. ONS data on Tuesday showed inflation rose 0.3% in the year to April, down from 0.5% in March.

"The positive gap between earnings growth and consumer price inflation has halved from the peak levels seen around August/September 2015 - thereby diluting consumers’ purchasing power," Archer said.