The unemployment rate in the period between January and March unexpectedly fell to its lowest level in almost 42 years at 4.6 per cent. Economists polled by Reuters had expected the rate to remain at 4.7 per cent.
There was slightly better news on the unemployment front, as the unemployment rate in the quarter through to March stood at 4.6%, compared with 5.1% in the corresponding period previous year.
At the same time, real wages are decreasing, as average weekly earnings are lagging behind rising inflation.
Across the United Kingdom average earnings increased by 2.4% in the year to March, just 0.1% up on the previous month and below the latest CPI inflation rate of 2.7%.
"Without higher wage growth, real earnings will continue to fall for the next two years, weighing on consumer spending and thus GDP growth", said Christian Schulz at Citi.More news: Pak counsel rubbishes legal fees rumours, adds India misled ICJ
That marked an increase of half a percentage point from the 1.9 per cent rate recorded in February and was the highest annual inflation rate since October 2014.
Food prices also shot up over the month, seeing a 0.2 per cent month-on-month rise.
The Bank has predicted that inflation will peak at just under 3% in the final three months of 2017, far outstripping weak wage growth.
The ONS also reports the rate of inflation including the cost of housing - CPIH (Consumer Prices Index including Housing).
The opposition Labour Party on Tuesday sought to highlight rising costs for voters as it launched its policy proposals for the June 8 election, pledging a higher minimum wage and state involvement in the energy sector to keep prices down. While rising inflation and the weak pound are supportive of a rise in interest rates under normal circumstances, the weakening economy and the expected slowdown in business investment preclude any hike in interest rates for the rest of the year.More news: US oil output back near records, challenging OPEC
Economists taking part in a Reuters poll had predicted a rise of 2.6 percent.
Prices were 2.7 per cent higher than the same month a year ago, up from 2.3 per cent during March.
The ONS said that air fares went up 18.6%, reflecting the usual pattern of increasing prices around Easter. The increase in core inflation has been relatively modest compared with higher headline inflation.
Official figures show the United Kingdom unemployment rate has managed to fall to 4.6 per cent.
Data released yesterday showed United Kingdom consumer price inflation picked up speed in April to hit 2.7% and many economists think it will reach 3% soon.More news: Man who ran over pedestrians was 'hearing voices'
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