UK's unemployment rate suffers unexpected rise

Business investment during the fourth quarter was flat when compared to the year before, a sign of the impact of Brexit uncertainty.

By June 2017, the amount produced per hour was only 0.4 per cent larger than it had been nine years before.

Pay growth also improved - with average weekly earnings, excluding bonuses, up by 2.5%.

Employment growth was weaker than expected in the three months to December, rising by 88,000 people rather than the 173,000 Reuters poll consensus.

Gross domestic product expanded 0.4% sequentially instead of 0.5% estimated initially.

Stephen Clarke, senior economic analyst at think-tank the Resolution Foundation said: "It's early days but the evidence points to a plateauing in employment growth and pay pressure building".

Total UK GDP is nominally divided between more people as the population grows.

You can view the ONS report here. Businesses, too, have taken a more cautious approach on investment as they seek clarity over the post-Brexit economic landscape.

The annual pace of growth was also downwardly revised, from 1.8% to 1.7%, with the revised number marking a fall from the 1.9% growth seen back in 2016.

Despite the revision to GDP, John Hawksworth, PwC chief economist, said: "The big picture has not changed".

The figures give further evidence of the overwhelming dependence of the United Kingdom economy on the services sector, which accounted for 1.3 percentage points of 2017 growth.

Unemployment: Scottish minister says figures are "disappointing" (file pic).

"Our latest analysis, confirmed by the UK Government's own research shows a hard-Brexit could cost Scotland's economy £12.7bn a year by 2030, so we will continue to use all of the powers at our disposal to grow it".

The Bank of England can not allow itself to raise rates too soon for fear of sabotaging Britain's already sputtering economic growth.

Samuel Tombs at Pantheon Macroeconomics said: "The latest GDP data suggest that the economy remains in a fragile state and does not need to be cooled with another rate rise as soon as May".

Sterling was essentially flat against the dollar in the wake of the data at $1.3896.

"To make matters worse, it's becoming clear that the slowing momentum experienced at the tail end of previous year has dragged into the start of 2018".

  • Eleanor Harrison