UK Jobs Data Lower Than Forecast

U.K. unemployment declined and a measure of the number of people in work rose to a record, pushing the labor market closer to “full capacity,” according to the statistics office.

The number of jobless fell 7,000 in the fourth quarter to 1.6 million people, leaving the unemployment rate at 4.8 percent, the lowest in more than a decade. The employment rate rose to a record 74.6 percent, the Office for National Statistics said.

While the labor market is showing continued strength, that’s not fully showing up in wage data. Basic pay growth slowed in the quarter to 2.6 percent from 2.7 percent, weaker than economists had forecast. Growth in total pay also slowed, in part reflecting the timing of bank bonuses.

Despite labor shortages in some areas, firms told Bank of England agents recently they expect wage growth to slow to about 2.2 percent this year.

With inflation accelerating, that’s eating into real-pay growth, which at 1.4 percent in the last three months of 2016 was the weakest since the start of 2015.

The ONS data also said that the claimant count — a narrower measure of unemployment — plunged 42,400 in January after a revised 20,500 drop in December.

As expected after the data Sterling devalued from early morning highs

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