Easing jobs and wage data fuels rate cut hopes – Daily Business

Unemployment across the UK held at 5.1% and wage growth has slowed, giving further impetus to a cut in interest rates.

Chris Beauchamp, chief market analyst at IG: “Today’s employment figures from the UK were broadly in line with expectations, but with the unemployment rate holding at 5.1% the BoE will be relieved to see slowing wage growth, helping the case for a rate hike, if only modestly.

“With the unemployment rate holding steady there is hope that the economy continues on a shallow upward trajectory, though it is too much to hope for spectacular improvement given the long-term problems of low productivity and high energy costs.”

Luke Bartholomew, deputy chief economist, at Aberdeen said: “Another decline in the payrolls data suggest the labour market remained extremely sluggish at the end of 2025.

“Overall wage growth was a tad stronger than expected, but this in part reflects a very large divergence between public and private sector pay, with private pay much softer.

“So despite the slightly stronger GDP data last week, it looks like the economy entered 2026 with very little momentum. With the threat of tariffs once again weighing on the economy, the case for further Bank of England easing is strong, and we expect Bank Rate to fall to 3% later this year.”