Unemployment in Britain has risen to 5.2%, marking its highest level in five years, with wage growth slowing, prompting expectations of a possible interest rate cut by the Bank of England.
Unemployment in Britain has reached 5.2% in the last three months of 2025, marking the highest level in the past five years. The rate rose from 5.1% in the previous quarter, according to data from the Office for National Statistics. This increase in unemployment is coupled with a slowdown in wage growth, which decreased from 4.4% to 4.2% during the same timeframe, indicating a further weakening of the labor market.
The Financial Times reported that the rising unemployment figures are fueling expectations of an interest rate cut by the Bank of England to stimulate job growth. Investors are anticipating a 0.25 percentage point reduction in the interest rate during the upcoming monetary policy committee meeting in March, potentially lowering the rate to 3.5%. This move could be part of a broader strategy to support the economy amid growing concerns over sluggish wages and job availability.
Luke Bartholomew, a senior economist at Aberdeen Asset Management, commented on the situation, stating that the combination of rising unemployment and declining wages signals a frail labor market. The outlook suggests that without intervention, the current trends may continue to challenge both workers and investors, affecting overall economic stability in Britain as they navigate these unprecedented conditions.
