Finance: UK unemployment rose at its quickest level in almost 5 years — as wages continue to grow ahead of expectations

The UK's unemployment rate increased from 4.3% to 4.4% over the most recent data period.

• UK headline unemployment increases from 4.3% to 4.4% between October and December.
• The increase represents the first time since 2016 that the unemployment rate has risen, and the sharpest increase in nearly five years.
• ONS data shows that average wages increased more than expected over the same period, climbing 2.5%.

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LONDON – Unemployment in the UK unexpectedly rose between October and December last year, according to new data released by the Office for National Statistics on Wednesday.

The headline unemployment rate, which measures the percentage of the British workforce who want a job, but don't have one, was 4.4%, up from the previous reading of 4.3%.

Overall, there were 1.47 million unemployed Brits (those not in work but seeking and available to work), an increase of 46,000 from July to September last year.

"This is the sharpest increase in the unemployment level ONS has seen in almost five years," Matt Hughes, a senior statistician from the ONS said.

Wednesday's data marks the first time in a significant period of time that the UK's headline rate of unemployment has climbed, after several years of steadily declining joblessness. The number of people out of work has fallen so far in recent years that some commentators have described the situation as Britain's "jobs miracle."

Here's the chart showing the small upward move in unemployment in the last three months:

Elsewhere, average earnings beat forecasts, the ONS said, with earnings (both including and excluding bonuses) increasing by 2.5% over the data period, compared to an expectation of 2.4% growth.

"Earnings continue to grow more slowly than prices," Hughes said.

The UK's Consumer Prices Index (CPI) inflation rate — the key measure of inflation — remains elevated since the referendum, reading 3% in January.

That means that while earnings growth may be picking up, it is still lagging inflation and UK workers are seeing their real wages continuing to decline.

The Bank of England, however, expects real wage growth to move into positive territory during 2018.

The bank's monthly agents' summary of business conditions, which polls the central bank's operatives in the UK's regions to create a holistic picture of what's going on in the economy, last week showed that businesses expect wage growth to increase to 3.1% in 2018, up from 2.6% last year.

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