Wage growth tumbles to lowest level for more than five years – ONS

Danni Hewson, head of financial analysis at AJ Bell, said: “Put bluntly, it’s still really tough out there if you’re looking for a job. Even without a crystal ball, further contraction in the labour market seems inevitable as energy prices jump.

“The slight uptick in payrolled workers in February might have previously been considered an early sign of economic recovery as businesses finally felt able to move on from those increased labour costs which prompted many to their rejig headcounts. But as the price of oil and gas surge once again it’s hard to envision that those green shoots will survive, let alone thrive.

“Businesses need stability and the situation in the Middle East has left many trying to keep their balance amid continued global volatility. Lots of companies will be nervous about making any big decisions, especially if borrowing costs move upwards later this year.

“Just a few weeks ago today’s jobs figures would have been seen as the final green light for the Bank of England to cut interest rates once again in a bid to inject some adrenaline into the sluggish economy. Inflation was heading back towards the Bank’s 2% target, and with wage growth at a five-year low, rate setters would have found little to hold them back.

“But that was then and today MPC members will have to consider how the war in Iran will impact prices. Markets will be watching the vote split closely for an indication of where rates may move next, depending on how long the conflict lasts.

“Whilst today’s decision is unlikely to bring any surprises, it is an important moment. Andrew Bailey will be hyper aware that his comments have the power to further undermine business confidence which in turn could push unemployment higher.”