Basic pay in United Kingdom (UK), excluding bonuses, rose by 6.5% in the three months to January compared with 6.7% in the three months to December, representing the first slowdown since late 2021.

Total pay grew by an annual 5.7% in the November-to-January period, slowing from 6.0% in the previous figures and the weakest increase since the three months to July last year, the Office for National Statistics said.

The UK labour market has undergone significant changes over the years, influenced by economic trends, technological advances, government policies, and societal shifts.

The UK has a diverse and dynamic labour market, with employment opportunities across a wide range of sectors and industries.

Economists polled by Reuters had expected basic and total earnings to rise by 6.6% and 5.7% respectively. Britain’s unemployment rate held at 3.7% in the three months to January, close to its lowest in almost five decades, the data also showed. Economists polled by Reuters had mostly expected the rate to rise to 3.8%.

The Bank of England (BoE) is expected to raise borrowing costs on March 23 by a further quarter of a percentage point to 4.25% although investors have cut their bets on such a move sharply after the collapse of U.S. lender Silicon Valley Bank.

Interest rate futures showed investors were putting the chance of the BoE pausing its rate hikes next week at about 40% at 0830 GMT while a quarter of a percentage point increase in borrowing costs was seen as a 60% possibility.

Finance minister Jeremy Hunt is expected to announce measures in his budget statement on Wednesday that will seek to get more people into work, easing the inflationary pressure in the labour market.

“The jobs market remains strong, but inflation remains too high,” finance minister Jeremy Hunt said after the data was published, a day ahead of his budget speech.

“Tomorrow at the budget, I will set out how we will go further to bear down on inflation, reduce debt and grow the economy, including by helping more people back into work.”

Tuesday’s data showed earnings were further diminished by an inflation rate that stood above 10% in January.

There were some signs of a further easing of the tightness in the labour market with the economic inactivity rate – measuring people out of work and not looking for it – falling by 0.2 percentage points to 21.3%, driven mostly by young people.

Vacancies decreased for the eighth time in a row in the three months to February, falling by 51,000 from the previous three months to 1.124 million.

In recent years, the UK labour market has faced challenges due to the COVID-19 pandemic, including job losses and reduced working hours in some sectors, while others, such as healthcare and delivery services, have experienced increased demand for workers. The pandemic has also accelerated trends towards remote work and digitalization.

The UK government plays a significant role in shaping the labour market through policies such as minimum wage laws, employment regulations, and welfare programs. The UK also has a complex system of employment classification, including employees, workers, and self-employed individuals, each with different legal rights and protections.

Overall, the UK labour market is subject to ongoing changes and challenges, and its evolution will continue to be shaped by a variety of economic, social, and political factors.