UK unemployment unexpectedly rises to 5% as firms squeezed by Iran war
Summary
Unemployment in the UK rose to 5% in early 2024, with slower wage growth as companies deal with higher costs linked to the Iran war. Despite this, the UK economy showed growth in the first quarter, leading some forecasts to predict moderate economic expansion.Key Facts
- UK unemployment increased from 4.9% in February to 5% in the three months to March 2024.
- The number of employees paid through payroll fell by 100,000 in April, after a drop of 28,000 in March.
- Wage growth slowed to 3.4% year-on-year (excluding bonuses), the slowest since October 2020.
- After accounting for inflation, real wage growth was only 0.3%.
- Including bonuses, wages grew by 4.1%, up from 3.8% the previous quarter.
- The Iran war, starting on 28 February, has driven up energy prices due to the closure of the Strait of Hormuz, affecting UK businesses.
- The UK economy grew by 0.3% in March 2024 and 0.6% in the first quarter overall.
- The International Monetary Fund raised its UK growth forecast for 2026 from 0.8% to 1%.
- The Bank of England expects unemployment could rise to 5.5-5.6% by summer 2027 due to ongoing economic pressures from the Iran war.
Read the Full Article
This is a fact-based summary from The Actual News. Click below to read the complete story directly from the original source.