United Kingdom inflation rate edges up to 0.3 percent in January

But wage growth rose only slightly, edging up to 2 per cent on average in the three months to December, from 1.9 per cent during the previous three months.

That amounts to an unemployment rate of 5.1%, unchanged from November but down from 5.7% 12 months earlier.

Jobless benefits, a narrower measure of unemployment, fell 14,800 to 760,200 in January, taking the rate to 2.2 percent.

But despite the rise, inflation remains historically low, with the central bank predicting that it will remain well below its 2 per cent target for some time yet.

The number of United Kingdom nationals in work increased by 278,000 between October and December to 28.28m, while for non-UK nationals the figure rose by 254,000 to 3.22m.

While unemployment held at a decade-year low of 5.1 percent in the fourth quarter, pay pressures remained weak with earnings growth slowing to 1.9 percent, the Office for National Statistics in London said on Wednesday.

The proportion of non-UK nationals in work in this country has increased from 3.8% in 1997 to 10.2%.

“Even Ian McCafferty, the most hawkish member of the MPC said [on Monday] that he withdrew his vote for higher interest rates because he feels inflationary forces have receded in recent months.” noted Brettell.

“At a time when we are seeing the number of workless households at its lowest ever, this is further proof that our economic and welfare reforms are delivering more security and providing opportunities that give families the best chance in life”.

“In the face of significant turbulence in the global economy, it is encouraging that more people than ever have the security of a job and a rising pay packet”, he said.

“By working to halve the disability employment gap, we want to make sure more people can reap the positive financial and health rewards of employment, and are helped to achieve their ambitions”.

Economists had pencilled in a fall in the unemployment rate so today’s figure may be interpreted as a slight disappointment.

The number of people in work hit a record high of 31.4 million, some 74.1 per cent of the workforce.

“December’s United Kingdom labour data continued to paint a mixed picture”, said ING economist James Smith.