Commenting on the latest employment market, Yael Selfin, Chief Economist at KPMG UK said:
“Today’s data raises the prospect of the Bank of England resuming cutting interest rates in March. The MPC will be reassured by further evidence of pay pressures easing, and the labour market continuing to soften. The Bank may also want to minimise downside risks to the labour market and lower rates ahead of the next forecast meeting in April.
Unemployment increased slightly to 5.2% in the three months to December. While there was a steady rise in the unemployment rate in 2025, we expect unemployment to stabilise around the current level over the coming year.
Forward looking survey data points to hiring conditions beginning to improve, while vacancies have broadly been flat over the past few months. Overall, we expect the unemployment rate to average 5.2% in 2026.”
