Britain's unemployment rate unexpectedly fell to 4.9% in the three months to February, its lowest level since last summer, according to the Office for National Statistics (ONS), while wage growth excluding bonuses slowed to 3.6% year on year — the weakest pace since November 2020. However, more timely payroll data for March showed 11,000 fewer employees on company payrolls than the previous month, surpassing economists' forecasts of a 5,000 decline, suggesting businesses have begun scaling back hiring in response to rising energy costs triggered by the Iran war, which began on 28 February. Analysts warn the deterioration is likely to deepen, with the EY Item Club forecasting unemployment could reach 5.8% by mid-2027, with young workers — already facing a youth unemployment rate of 14.3%, the highest since 2015 — expected to bear the heaviest burden.