UK wage growth slows and unemployment rate rises as companies react to Iran war – business live

UK labour data showed a softer jobs market: unemployment unexpectedly rose to 5% in the three months to March, while regular wage growth slowed to 3.4% y/y from 3.6% previously. Real wages increased only 0.3%, and payrolled employment fell by 100,000 in April after a revised 28,000 drop in March, the biggest monthly decline outside Covid since records began in 2014. The release points to weaker domestic demand and growing caution from employers as higher energy prices and geopolitical uncertainty from the Iran war hit business confidence. Vacancies fell to 705,000, a five-year low, and the number of unemployed people per vacancy is now among the highest since 2020. WPI Strategy noted the labour market is starting to feel the repercussions of higher energy prices, geopolitical uncertainty and weaker business confidence. For precious metals, the read-through is modestly supportive at the margin via softer UK growth and the potential for a less hawkish Bank of England backdrop, though the bigger driver here is the inflation impulse from energy rather than a clean disinflation story. Near term, sterling and UK rate expectations will be the main transmission mechanism; any further deterioration in labour data could reinforce safe-haven demand for gold if it feeds broader risk aversion.