UK wage squeeze continues; US inflation jumps to 40-year high of 8.5% – as it happened

Rolling coverage of today's economic and financial news

• Latest: US inflation jumps to 8.5%
• WTO cuts forecast for global trade over Ukraine war
• Public sector workers bear brunt of UK pay squeeze
• UK real wages fell over last quarter
• Covid sickness pushes people out of jobs market
• UK jobless rate drops to 3.8%, further below pandemic levels
• Sri Lanka suspends bond payments amid economic crisis

Minister for employment, Mims Davies, points out that the unemployment rate has fallen to its joint-lowest level since the 1970s:

With the unemployment rate returning to the lowest we have seen in nearly 50 years, it is clear our Plan for Jobs has worked - protecting livelihoods and businesses throughout the pandemic.

Behind these ONS figures we know this is a difficult time for many workers and families. We're doing everything we can to help, with our Way to Work scheme which is supporting people coming through the doors of our Jobcentres to move into better paid, higher skilled work. As well as increasing the National Living and Minimum Wage all backed up by over 22bn of targeted investment.

Today's figures show that Conservative choices are leaving real wages squeezed and people worse off.

At a time like this, Rishi Sunak could have chosen a one-off windfall tax on huge oil and gas company profits to cut household energy bills by up to 600.

Labour demand was a bit weaker than we expected at the start of the year. Admittedly, LFS employment still increased by 10,000 in the three months to February (consensus forecast: 53,000) up from -13,000 in January. But the single month data showed that in February itself employment fell by 89,000.

In the three months to February, the unemployment rate fell from 3.9% to the rate of 3.8% seen before the pandemic. That further fall reflected a rise in inactivity of 76,000 in the three months to February, driven by more people saying they were retired, looking after family/home or long-term sick.