UK unemployment touches five-year high

UK unemployment reached its highest since the pandemic and wage growth eased as the labor market continued to weaken, prompting traders to increase bets on further interest-rate cuts from the Bank of England.

The jobless rate climbed to 5.2% in the final quarter of last year, the Office for National Statistics said Tuesday, the highest since early 2021 and above the 5.1% economists were forecasting. Regular private sector wage growth, the BOE's preferred pay indicator, fell to 3.4%, the lowest level in over five years.

Separate tax figures showed the the number of employees on payroll fell in 11,000 in January, taking the drop over the last year to 134,000. Together, the data are likely to reassure BOE policymakers that inflationary pressures in the labor market are easing fast enough to cut interest rates again.