UK unemployment rate holds steady at 5.1%

The UK unemployment rate remained unchanged at 5.1% in the three months to December, official data revealed on Wednesday.

Analysts had expected the Office for National Statistics to reveal the jobless rate fell to 5.0%.

The figures also showed UK employers added 205,000 jobs to the economy during the three-month period, missing forecasts of 225,000 extra people in work.

Average weekly earnings rose 1.9%, in line with estimates, marking a slowdown from the previous quarter’s 2% increase.

Jobless claims in January fell 14,800, ahead of expectations for a 3,000 drop.

“Today’s UK jobs market data looks fairly bullish. The unemployment rate remains at its lowest level in almost a decade and wage growth has ticked up," said Dennis de Jong, managing director at UFX.com.

“Chancellor George Osborne will be hoping that the introduction of the national living wage in April will see pay increase and help inflation rise further."

Capital Economics said the easing in wages adds to the Bank of England’s case to keep interest rates unchanged for the time being. The BoE noted in its Inflation Report earlier in February that wage growth had “eased significantly” more than anticipated.

“The soft UK pay growth shown in today’s labour market figures – which is still at odds with the tightening labour market – highlights why the MPC won’t be raising rates anytime soon,” said Ruth Miller, UK economist at Capital Economics.