Investing.com - The British labor market remained tight at the start of 2019, with the jobless rate hitting its lowest level in 44 years and wage inflation rising at the fastest pace since the financial crisis, despite concerns over the U.K.’s imminent exit from the European Union.
The jobless rate unexpectedly fell to 3.9% in the three months to January, its lowest level since January 1975, while the number of people in work rose 222,000, its largest increase since 2015.
Average earnings, excluding bonuses, continued to rise at their fastest pace since the financial crisis over 10 years ago, jumping 3.4% in the three months to January. That was above forecasts for a 3.2% rise.
The data, which was unexpectedly released 12 minutes ahead of the scheduled time, did little to move the pound despite the strong numbers amid the uncertainty surrounding the next steps in the Brexit process ahead of the current March 29 deadline.
Given the lack of clarity surrounding the U.K.’s departure from the EU, the solid labor market data is unlikely to sway expectations that the Bank of England will leave its monetary policy unchanged when it announces its interest-rate decision on Thursday.
"Rapid job gains and wage growth continue to make the case for rate hikes," Samuel Tombs, chief U.K. economist with Pantheon Macroeconomics in London, said via Twitter.
Before the approach of Brexit and the broader global slowdown started to weigh on the economy, the BoE had indicated that ‘several’ interest rate increases may be necessary to bring policy back to a neutral rate. Governor Mark Carney softened his language at his last press conference, saying that interest rates could go either way.