UK unemployment rate much lower than thought in late 2023

Workers cross London Bridge during the morning rush hour in London, Britain, March 10, 2023. REUTERS/Toby Melville

LONDON  —Britain’s unemployment rate was much lower late last year than previously thought, the Office for National Statistics said on Monday, citing re-weighted survey results that might add to the Bank of England’s caution about cutting interest rates quickly.

The new data showed a unemployment rate of 3.9 percent in the three months to November, compared with 4.2 percent provided by the ONS last month on a temporary, experimental basis.

The BoE is watching Britain’s labor market closely as it considers whether inflation pressures in the economy have cooled enough for it to cut its benchmark interest rate from its highest level in nearly 16 years at 5.25 percent.

The ONS said Britain’s inactivity rate – measuring people out of work and not looking for it – was estimated at 21.9 percent over the same period, up from 20.8 percent.

The re-weighted employment rate was estimated at 75 percent in the new data, versus 75.8 percent in the experimental series.

The new estimates use the ONS’ latest estimates of the population to re-weight its Labor Force Survey (LFS).

The ONS took suspended publishing official LFS data in October due to low response rates in the aftermath of the COVID-19 pandemic. It has instead published experimental estimates that relied on tax and other data sources.

The ONS plans to launch its improved LFS survey later this year.