United Kingdom unemployment fell to 4.9% in the three months through the end of February, a sharper drop than economists had anticipated. Consensus forecasts had predicted the rate would hold steady at 5.2%. The data, published Tuesday by the Office for National Statistics, covers the first full month after the outbreak of the U.S.-Iran conflict, which has rattled global supply chains and energy markets.
Wage growth came in at 3.6% on the year. That figure will factor into the Bank of England's calculations on interest rates, particularly as inflation pressures linked to elevated oil prices continue to complicate the outlook.
Bloomberg reported that UK employers cut jobs during that opening month of the conflict, suggesting the headline unemployment figure may not fully capture the stress businesses are already absorbing. The divergence between falling unemployment and rising job cuts points to a labor market in transition rather than one that is simply strengthening.
European stocks traded modestly higher Tuesday, with the Stoxx 600 up 0.1%, as investors weighed the UK labor data alongside ceasefire developments in the Middle East. The FTSE and other major European bourses were broadly positive by mid-morning in London.
