Surprise fall in UK unemployment – but pay growth also slows

• The UK's unemployment rate unexpectedly fell to 4.9% in the three months to February 2026, down from 5.2%.
• This decrease is primarily attributed to a rise in economic inactivity, particularly among students, rather than an increase in employment.
• Job vacancies continued their decline, reaching 711,000, which is the lowest level recorded since April 2021.
• Average earnings grew 0.4% faster than Consumer Prices Index (CPI) inflation, representing the slowest wage growth rate in over two and a half years.
• Analysts warn that these figures do not yet fully reflect the impact of the Iran war, anticipating a further softening of the labour market.

IN FULL

Unemployment falls below 5% in surprise boost for Labour