UK rate of interest reduce seemingly in March as unemployment fee rises; Polanski requires ’Covid-style mobilisation’ to sort out youth jobless disaster – enterprise stay | Enterprise
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Financial institution of England ‘firmly on monitor’ to chop rates of interest in March
The probabilities of a reduce to UK rates of interest subsequent month have risen, following this morning’s information displaying an increase in unemployment and a slowdown in wage development.
The Metropolis cash markets now point out there’s a near-75% likelihood that the Financial institution of England lowers rates of interest to three.5% at its subsequent assembly, in March, up from 69% final evening.
Buyers now absolutely anticipate two fee cuts by Christmas, which might deliver Financial institution Charge down to three.25%.
James Smith, developed markets economist at ING, says as we speak’s UK jobs report retains the Financial institution of England “firmly on monitor” for a March fee reduce.
Smith says:
Unemployment is up and hiring surveys are nonetheless getting worse. That mentioned, the weak spot continues to be closely concentrated in consumer-facing industries – a legacy of final 12 months’s sizable payroll tax (Nationwide Insurance coverage) and Nationwide Dwelling Wage will increase. Hospitality payrolled employment could also be down virtually 3% for the reason that begin of 2025, however it’s nonetheless 2% larger than pre-Covid ranges. But financial output continues to be 6% beneath – suggesting the lack of jobs might have additional to run.
Exterior of those consumer-centric industries, the story seems to be extra benign. Employment continues to be trending down throughout the broader non-public sector on a three-month common of payrolls development, however solely barely. We’re additionally not seeing a very noticeable pick-up in redundancies throughout the financial system. Emptiness numbers have stopped falling, too.
Yael Selfin, chief economist at KPMG UK, says the fall in pay development to 4.2% strengthens the case for a March rate of interest reduce:
“At present’s information raises the prospect of the Financial institution of England resuming slicing rates of interest in March. The MPC will probably be reassured by additional proof of pay pressures easing, and the labour market persevering with to melt. The Financial institution can also wish to minimise draw back dangers to the labour market and decrease charges forward of the subsequent forecast assembly in April.
“Headline pay development eased in December, falling from 4.4% to 4.2%. The autumn in headline pay was partly pushed by an easing in public sector wage settlements, which fell for the primary time since July 2025. Demand for labour stays weak which has curtailed employees’ bargaining energy, in the meantime falling prices for households also needs to mood pay demand amongst employees. We anticipate pay development to fall to three% by the tip of 2026.
Key occasions
Wall Road has opened, after yesterday’s Presidents’ Day vacation, and tech shares are beneath stress once more.
The technology-focused Nasdaq index has dropped by 0.6% in early buying and selling.
Software program agency Synopsys (-2.7%) are the highest Nasdaq faller, adopted by chipmaker Micron (-2.2%%) and storage agency Western Digital (-2%).
The Metropolis could also be getting carried away by concluding a March rate of interest reduce is fairly seemingly, suggests Professor Costas Milas of the College of Liverpool’s Administration College.
He tells us:
Earlier than we (economists) soar into conclusions a few Financial institution Charge reduce subsequent month, we must always take into account the newest unemployment rise to five.2% in a historic context.
I plot beneath CPI inflation along with my estimate of the unemployment fee hole (unemployment much less “equilibrium” or development unemployment). Though present unemployment exceeds “development” unemployment by 1.1 proportion level, historical past reveals a unfavorable correlation of solely-0.10 between the 2 sequence.
Assuming causation from a cooling labour market to inflation, historical past suggests a very weak affect from the labour market on UK inflation and due to this fact a Financial institution Charge reduce is (ought to be) removed from given!
At present’s unemployment figures are “actually regarding, significantly for youthful folks,” warns Mark Rowland, chief government of the Psychological Well being Basis.
Rowland says:
We all know {that a} sizeable variety of younger folks out of labor are scuffling with their psychological well being, and that many individuals discover their psychological well being is a blocker to discovering and staying in high quality employment. That is regardless of our analysis suggesting that poor psychological well being mustn’t disqualify folks from employment, significantly as high quality work generally is a internet constructive for folks’s psychological well being, serving to construct confidence and connections when the situations and assist are proper.
“Whereas some might search to chastise younger folks for struggling to steadiness their psychological well being and dealing life, a greater method could be to make modifications to workplaces, hiring practices, and employment assist that assist these of us with psychological well being issues to entry work and keep properly. This implies being paid sufficient to afford the necessities, having flexibility, and giving younger folks the instruments and confidence to know that work might be constructive pressure on their psychological well being and a part of a satisfying life.
“We should additionally resist calls to decrease working protections and wages. Poor high quality work that’s low paid, unpredictable, or in hostile environments can drastically worsen folks’s psychological well being. If we make the office a much less accessible place for folks with psychological well being issues, we’re more likely to see an increase fairly than a fall within the variety of folks experiencing poor psychological well being and having to depart employment.”
UK bond costs are holding onto their earlier positive aspects, pushing down Britain’s price of borrowing a bit of.
Kallum Pickering of Berenberg financial institution has noticed that UK bond yields are falling by greater than different nations:
On a day when UK labour market information are weaker than anticipated, together with on wages, discover how UK bond yields are falling by greater than elsewhere. Anticipate this sample to emerge extra strongly over coming months as UK inflation falls again to 2% … #ukeconomy #ukmacro pic.twitter.com/lPjCdkQ7i6
— Kallum Pickering (@KallumPickering) February 17, 2026
Being unemployed in a single’s youth can have a pernicious affect in your incomes potential years, and even a long time, later.
Claire Leigh, Director of Public Affairs at charity Impetus, explains:
“At present’s labour market stats remind us why getting extra younger folks into work should stay a prime precedence for Authorities – it’s crucial not just for their futures, but additionally for the financial system at giant.
Spending time unemployed beneath the age of 23 has been linked to decrease wages even 20 years later, and we all know that these long-term results usually are not felt equally.
Our analysis has proven that the younger folks furthest from the labour market, together with these from deprived backgrounds, with low {qualifications}, or particular academic wants and disabilities, face compounding challenges that may intersect to make them as much as 3 times extra more likely to be unemployed than common. We urge Authorities to make sure that these younger folks – those dealing with the best obstacles to work – have entry to the best assist.”
UKHospitality: Authorities should ease stress to assist us rent younger folks
The UK’s hospitality sector, which has historically provided many younger folks their first job (completely satisfied days….), says the rising prices of taking over workers is pushing up youth unemployment.
Allen Simpson, CEO of UKHospitality, blames the rise in nationwide insurance coverage in Labour’s first funds:
“At present’s labour market figures underline the rising pressure on the UK jobs market, with unemployment rising to five.2%, its highest stage since early 2021, and payroll employment persevering with to fall.
“Sadly, youthful employees and entrylevel roles are bearing the brunt of this slowdown, with employment amongst under-35s down sharply since mid2024.
Hospitality is an important entry level into work for younger folks, however rising prices and coverage selections – together with modifications to employer Nationwide Insurance coverage, costing the sector £3.4bn a 12 months – are making it more durable for companies to create, maintain and recruit into these roles. With out pressing motion to ease the stress on employers, we threat locking a era out of important alternatives to achieve abilities, expertise and a foothold within the workforce.
“If the Authorities is severe about development and tackling youth unemployment, it should urgently ease the stress on hospitality companies and cease taxing jobs out of the financial system.”
Polanski requires ‘Covid-style mobilisation’ to sort out youth unemployment disaster
Inexperienced Celebration chief Zack Polanski is looking for a ‘Covid-style mobilisation’ to sort out the UK’s youth unemployment disaster.
Following this morning’s information displaying that the unemployment fee amongst 18-24 12 months olds has hit 14%, its joint highest stage in a decade, Polanski says:
“Younger folks have been betrayed by a era of politicians who’ve ignored their considerations, sidelined their pursuits, and offered off their futures.
“Far too many younger individuals are caught – residing with their dad and mom as a result of rents are too excessive, saddled with tens of 1000’s of kilos of pupil debt, and unable to get an honest job to allow them to begin their lives.
“We want a mobilisation on the dimensions of the COVID response to sort out this disaster and get younger folks’s lives again on monitor earlier than we see a complete era misplaced to long-term unemployment.”
Warner Bros offers Paramount every week to make a greater takeover supply
The takeover battle for Warner Bros Discovery has taken one other twist.
Warner Bros has introduced it has rejected Paramount Skydance’s newest $30-a-share hostile takeover bid, having beforehand accepted a bid from Netflix as a substitute.
Nevertheless, Warner Bros can also be giving Paramount seven days to see if it might probably give you a greater deal to purchase the proprietor of HBO Max and the “Harry Potter” franchise, Warner Bros mentioned on Tuesday.
Intriguingly, Warner Bros additionally declare that “a senior consultant” for Paramount had urged they may pay $31 per share.
Paramount now has till February 23 to submit its “greatest and remaining supply,” which Netflix is allowed to match beneath the phrases of the merger settlement, Warner Bros mentioned.
Samuel A. Di Piazza, Jr., Chair of the Warner Bros. Discovery Board of Administrators says:
“As introduced as we speak, we proceed to consider the Netflix merger is in one of the best pursuits of WBD shareholders because of the great worth it supplies, our clear path to attain regulatory approval and the transaction’s protections for shareholders in opposition to draw back threat.
With Netflix, we’ll create a brighter future for the leisure trade – offering customers with extra selection, creating and defending jobs and increasing U.S. manufacturing capability whereas growing investments to drive the long-term development of our trade.”
Lisa O’Carroll
Irish exports surged to document ranges in 2025 on the again of tariffs threatened by Donald Trump final March.
The 16% rise was largely pushed by medical gadgets and prescribed drugs made in Eire by US and European multinationals together with Pfizer, maker of Viagra, and Novo Nordisk, maker of Ozempic.
They accounted for greater than 50% of all exports within the 12 months.
Preliminary figures issued by the federal government’s Central Statistics Workplace, present the nation exporters €260bn value of products in 2025 with the US the highest vacation spot market, adopted by the Netherlands and Belgium the place key ports Rotterdam and Antwerp/Bruges act as worldwide delivery gateways.
Exports of medical and prescribed drugs went up 39% to €138.9bn in contrast with €99.7bn in 2024 representing 53.2% of complete exported items in 2025.
Pharma and medical machine corporations rushed to export items to the US in spring after Donald Trump threatened a number of tariffs on medicine made in Eire.
He accused Eire of stealing the US pharma trade at a St Patrick’s assembly with the Irish premier Micheál Martin final March.
Charts: How UK pay development has slowed
As is chart present, UK pay development has slowed notably in latest months.
Common pay (ie, excluding bonuses) development has dropped to 4.2% in October-December 2025, down from 5.9% in the identical quarter a 12 months in the past.
That has pushed down development in actual wages (ie, earnings after CPIH inflation) to only 0.5% within the remaining quarter of 2025, down from 2.4% in October-December 2024).
The weak spot of the pound this morning helped to push the UK’s inventory market in direction of a brand new document excessive.
The FTSE 100 share index rose as excessive as 10,528 factors, up 54 factors, solely seven factors off its all-time peak set final week.
A fall within the worth of sterling usually boosts the share costs of multinational corporations listed in London, because it makes their abroad earnings extra beneficial.
Fawad Razaqzada, analyst at Metropolis Index, says:
“The FTSE 100 edged larger to shut in on final week’s document, because the pound weakened following the discharge of UK wages and Jobs information that places a March fee reduce firmly on the desk, barring any surprises in tomorrow’s inflation report. Except we see a pointy turnaround in information, I’d expect one other fee reduce in June, and presumably extra in the summertime if inflation dangers ease.
This could hold the long run FTSE 100 forecast firmly supported and hold a lid on sterling.
Lisa O’Carroll
Shein has responded to the EU’s investigation, saying in a press release it took its obligations beneath the DSA “critically”.
Shein says it has all the time cooperated absolutely with the European Fee and Coimisiún na Meán [the Irish regulator which will lead the investigation] and would “proceed to” accomplish that.
It added it had taken steps to restrict harms, saying:
“Over the previous few months, we’ve got continued to speculate considerably in measures to strengthen our compliance with the DSA. These embody complete systemic-risk assessments and mitigation frameworks, enhanced protections for youthful customers, and ongoing work to design our providers in ways in which promote a secure and trusted person expertise.”
Value of bank card borrowing hits 20-year excessive
The price to borrow on a UK bank card has hit its highest stage in at the least 20 years, information supplier MoneyFacts experiences.
MoneyFacts information reveals that the the common bank card buy APR [annual percentage rate] hit 35.8% in February, the very best fee since data started in June 2006.
Rachel Springall, Finance Professional at Moneyfactscompare.co.uk, says:
“The newest statistics from UK Finance reveal round half of bank card holders are actually incurring curiosity prices, and whereas some would possibly solely owe a number of hundred kilos, there will probably be others with considerably extra debt that must be paid again. Fortunately, there are some prolonged interest-free steadiness switch playing cards to select from, with TSB main the market with a 38-month time period, which prices a switch price of three.49%. Reviewing card statements usually is significant to remain on prime of money owed, however it’s additionally sensible to make a calendar observe of when any balances will incur curiosity. Shifting money owed round is useful to seize interest-free presents, however the debt will hold overhead if solely the minimal repayments are made every month.
“Not each borrower can have one of the best credit score rating, which is why it’s sensible to test a credit score report typically earlier than making use of for a brand new card, and kind out any discrepancies. Those that get turned down might want to prioritise paying their money owed as shortly as attainable. Making fastened bank card funds is the quickest solution to clear money owed, these utilizing a bank card charging 35.8% APR with a debt of £500 would take a complete 12 months to pay it off based mostly on a set compensation of £50, and it could price £85 in curiosity. Growing this cost to £100 per thirty days would clear the debt in six months, and halve the curiosity charged (£42).
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