According to the UK unemployment rate, joblessness rose to 5.2% in the three months to December while annual pay growth cooled to 4.2%. The Office for National Statistics flagged "weak hiring activity" and a rising pool of jobseekers, pushing youth unemployment sharply higher and prompting immediate questions about how fast the Bank of England can move on rates.
In Asia, Japan’s recovery looked fragile. Government data showed fourth-quarter GDP expanded at an annualised pace of 0.2%, well below market forecasts and leaving household spending soft enough that Tokyo narrowly avoided a technical recession, according to official GDP figures. That weak print increases pressure on Prime Minister Sanae Takaichi to deliver fiscal stimulus while complicating the Bank of Japan’s move toward normalising monetary policy.
Meanwhile the Reserve Bank of Australia told markets it no longer sees a single predictable path for policy, having raised the cash rate to 3.85% and warning further moves depend on new data. The minutes highlighted persistent domestically driven inflation risks and a still-tight labour market, undercutting earlier bets on a clear easing cycle and making central banks from London to Canberra more data-dependent in the weeks ahead.
Policy and markets will react fast: weaker jobs and slowing wages in the UK raise the odds of near-term Bank of England cuts, Japan’s soft GDP keeps fiscal support on the table, and the RBA’s hawkish pivot keeps financial conditions uncertain. Watch upcoming wage, CPI and hiring prints — they will determine whether rates ease or stay elevated, and position your portfolio and hiring plans accordingly.
