UK unemployment shows surprise fall to 4.9% as pay growth drops to lowest in five years

Bank of England expected to keep interest rates on hold as Iran war casts shadow over labour market

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Unemployment in the UK unexpectedly fell in the three months to February, according to official figures – but the fallout from the conflict in the Middle East is expected to cause a rise in job cuts.

The Office for National Statistics (ONS) said that the rate of unemployment was 4.9% in the three months to February, the lowest level since last summer. This compares with 5.2% in the three months to January, a rate that economists had expected to also see in February.