Jobless rate drops to 3.7 in Q1 from previous 3.8
Unemployment rate at its lowest in nearly 50 years
Pay including bonuses leaps by 7.0 on year
Biggest fall in inflationadjusted earnings since 2013
BoE sees risk high pay growth could entrench inflation

LONDON, May 17 Reuters Britain39;s jobless rate hit a 48year low in the first three months of 2022 and employers paid bigger bonuses to keep or attract staff, according to data that added to bets by investors on further Bank of England interest rate hikes.

Core earnings for most workers fell by the greatest amount since 2013 when adjusted for surging inflation, the Office for National Statistics said on Tuesday.

But total pay including bonuses was up 7.0 on a year earlier, far above economists39; average forecast of 5.4.

Sterling climbed by 1.1 against the U.S. dollar and rose by 0.6 against the euro. Investors priced in a 30 chance that the BoE39;s Monetary Policy Committee will resort to raising interest rates by half a percentage point in June.

The jobless rate dropped to 3.7 from 3.8 below forecasts in a Reuters poll for it to hold steady and the number of people out of work was less than job vacancies on offer for the first time on record.

We were taken aback by the strength of today39;s labour market release, especially bearing in mind the fears of a downturn in the economy, Philip Shaw, an economist at Investec, said. Indeed it will do nothing to quell the MPC39;s concerns over inflationary pressures….