Bonuses push up average UK earnings

Data released today shows that the number of people seeking unemployment benefits in the UK fell for the tenth month in a row in March dropping 4,200 to 882,200, keeping the unemployment rate unchanged at 2.9%.

The ILO measure of unemployment fell by 33,000 in the three months to February to 1.43 million, the lowest total in 20 years. This kept the rate at 4.8%, a record low.

However, manufacturing jobs continue to fall. Employment in the sector has not risen since November 1998.

Separately, higher bonus payments, particularly in the financial sector helped UK average earnings in February rise to their highest level since Aug 2001, official figures showed today.

The office of National Statistics said average earnings, including bonuses, rose 4.9% in the three months to February.

In addition, the previous 4.4% reading in January was revised up to 4.7%.

The bulk of the rise in the three month to Feb period came from Jan alone when average earnings rose 7.3% - the highest monthly level on record since March 2002. In Feb, average earnings rose 4%.

The latest positive earnings data strengthens the argument for those calling for an interest rate hike in May in the after the Bank of England's decision to hold borrowing costs at 4% in April.