There has been more unexpected good news for the British economy after a surprise fall in the UK unemployment.
Official figures from the Office for National Statistics (ONS) show that the country’s unemployment rate fell to 4.9 per cent during the three months to February.
This is down from 5.2 per cent and is the lowest level since last summer.
The news comes just days after the UK economy grew faster than expected in January and February of this year, whilst the UK has also regained its position as the fifth-largest economy in the world.
However, all of these pieces of good news for the Labour government come with one crucial caveat – the figures were from before Donald Trump’s war in Iran.
Alongside the unemployment figures, the ONS pointed out that early data from HMRC, covering workers in payrolled employment, showed a drop of 11,000 during March. This was of course the first month of the conflict in the Middle East which has seen global energy prices shoot up.
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Wage rises also fell back towards the pace of inflation in the economy, dropping to 3.6%, down from 3.8%.
ONS director of economic statistics, Liz McKeown, said: “The number of workers on payroll remained broadly flat in recent periods, reflecting ongoing weak hiring.
“Vacancies fell to their lowest level in almost five years, but with unemployment also falling the number of vacancies per unemployed person remains broadly unchanged.
“Alongside falling unemployment, the number of people not actively seeking work increased, with data suggesting fewer students seeking work alongside their studies.
“Regular wage growth has slowed further, with growth at its lowest rate in over five years.”
Earlier this month, the International Monetary Fund predicted the UK economy would suffer the biggest hit of all the world’s major economies as a result of the Iran war.
The new unemployment figures have been cautiously welcomed by the government though, with Work and Pensions Secretary Pat McFadden saying they “show that there was an improvement in the labour market at the beginning of the year with unemployment falling below 5%, and 332,000 more people in work than a year ago.”
However, he added: “But we cannot escape the effects of the war in the Middle East which are likely to feed through to prices and employment in the coming months. We will do everything we can to support the country through this period, including by slashing energy bills by up to 25% for 10,000 manufacturers.
“And we’re focusing on future proofing and upskilling our workforce through our £2.5bn investment to get more young people earning and learning alongside personalised support to help sick or disabled people who had previously been written off.”
It’s not wonder that Chancellor Rachel Reeves said this month she was “very frustrated and angry” about Trump’s war, whilst Prime Minister Keir Starmer has said he is “fed up” with the president’s actions.