UK wage growth slows and unemployment rate rises as companies react to Iran war – business live

Jobless rate unexpectedly rises to 5% and employment falls by 100,000, biggest drop in six years; economists say June interest rate hike looks less likely

UK government borrowing costs have eased this morning, while crude oil prices have also fallen, after Donald Trump said he had paused a planned attack on Iran to allow talks aimed at ending the US-Israeli war against the country.

The yield, or interest rate, on the 10-year gilt (as UK government bonds are known), dropped 5 basis points to around 5%. The 30-year yield fell 4 basis points to 5.7%.

A further drop in vacancies, now at their lowest outside the pandemic for more than a decade, suggests businesses are pausing recruitment. This is unsurprising as labour costs remain a key concern.

But with the conflict in Iran likely to drive higher inflation later in the year, as unemployment also rises and growth remains weak, the possibility of stagflation is very real. Continue reading...