21 April 2026
If you are covering the latest UK labour market statistics, please see the following comment from Jonathan Raymond, investment manager at Quilter Cheviot:
“While last week’s data revealed the economy bounced back more than had been expected in February, the same cannot be said of the labour market. In a continuation of its disappointing start to the year, the jobs market saw a 74,000 in the number of payrolled employees between February 2026 and the same month last year. Quarter on quarter, payrolled employees fell by 9,000, and by 87,000 over the year.
“Unemployment has surprised slightly, coming in at a slightly more palatable 4.9% in February compared to 5.2% reported last month. Meanwhile, annual wage growth came in slightly lower but remains above inflation at 3.6% for regular earnings excluding bonuses and 3.8% for total earnings including bonuses in December 2025 to February 2026.
“The initial estimates for March are also downtrodden, with employee numbers expected to drop by a further 65,000 on the year, with a high likelihood of further revisions. Given today’s data does not capture the initial impact of the conflict in the Middle East, we can expect the labour market to soften even more from here on out. Businesses have had hiring plans largely on hold since before the budget, and many will have swiftly put the brakes on again at the outbreak of the war. When combined with other factors including ongoing wage pressures, national insurance increases and changes to business rates, it is difficult to see the labour market making a swift recovery any time soon.
“The Bank of England’s monetary policy committee will reconvene next week to deliver its next interest rate decision, and today’s data, as well as what is expected to be an unpleasant inflation print tomorrow, will only further cement expectations for a hold. The conflict in the Middle East has seen energy prices soar, and the full effects will take some time to feed through, adding a fresh inflation risk and complicating the Bank’s decision-making process. It will soon have to make a call on how much it looks through any inflation spike and look instead to potential growth implications.”
