Rachel Reeves will insist her economic plan is working today after unemployment saw a surprise fall – but only before the Middle East crisis erupted.
The UK jobless rate dipped to 4.9 per cent in the three months to February, its lowest level since last summer.
However, the ONS said that was largely driven by a rise in numbers classed as inactive and not looking for work.
The more recent signs were also gloomy, with numbers on payrolls down 11,000 in March to 30.3million, 65,000 lower than a year before. Vacancies have dropped to a five-year low.
Pay rises have also been slowing dramatically, although public sector workers have been doing better than the private sector after Labour’s bumper settlements.
The UK jobless rate dipped to 4.9 per cent in the three months to February, its lowest level since last summer
The more recent signs were also gloomy, with numbers on payrolls down 11,000 in March to 30.3million, 65,000 lower than a year before
Vacancies have dropped to a five-year low
The ONS found the unemployment rate was down from 5.2 per cent in the three months to January.
Most economists had expected the jobless rate to remain unchanged.
The ONS said the fall was driven by a rise in inactivity, especially among students, which rose 70,000 in the quarter.
It also cautioned the figures should be treated with caution given an overhaul to the way they are collected.
Liz McKeown, ONS director of economic statistics, said: ‘Alongside falling unemployment, the number of people not actively seeking work increased, with data suggesting fewer students seeking work alongside their studies.
‘Regular wage growth has slowed further with growth at its lowest rate in over five years.’
The Chancellor is due to update MPs on the response to the Middle East turmoil later.
Work and Pensions Secretary Pat McFadden said: ‘These figures show that there was an improvement in the labour market at the beginning of the year with unemployment falling below 5 per cent, and 332,000 more people in work than a year ago.
The Chancellor is due to update MPs on the response to the Middle East turmoil later
‘But we cannot escape the effects of the war in the Middle East which are likely to feed through to prices and employment in the coming months.
‘We will do everything we can to support the country through this period, including by slashing energy bills by up to 25 per cent for 10,000 manufacturers.
‘And we’re focusing on future proofing and upskilling our workforce through our £2.5billion investment to get more young people earning and learning alongside personalised support to help sick or disabled people who had previously been written off.’
