Finally, some good economic news: Britain may have turned a corner on jobs. Figures just released by the Office for National Statistics (ONS) show the unemployment rate remained flat at 5.2 per cent in January.
On payrolled jobs there was positive news too: employees on PAYE payrolls in February grew at their fastest rate since October 2024, with 20,000 jobs added.
If this really is the turnaround point on jobs, it comes as welcome relief for a Chancellor whose minimum wage hikes and National Insurance raid were to blame for much of the job destruction. Despite today’s welcome increases, we’re still down by over 114,000 jobs since Labour came to power.
Whether this would truly have been the end of the job slump has now been made something of a moot point by events in Iran. This morning, oil has surged to $114 a barrel and gas prices have jumped by 30 per cent. Energy markets remain volatile, but the longer this drags on, the closer we’ll get to a global recession.
Britain is, of course, particularly vulnerable to an energy shock, given we already suffer the highest industrial electricity costs in the world (second highest for domestic).
A slowdown in consumption and an increase in the energy costs involved in running businesses will obviously hit the jobs market badly.
Meanwhile, wage growth slowed to 3.8 per cent in January – down from 4.2 per cent. That would have been welcome news to the Bank of England’s Monetary Policy Committee, which had wanted to see inflationary wage growth fall before cutting rates further. Indeed, in a different timeline, that data would have reinforced a decision to cut interest rates today. But we live in a very different world now, with inflationary fears very much back on the dashboard. The result: a hold in interest rates almost certain to be announced at midday today.
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