Newly-published data from the United Kingdom's Office for National Statistics, or ONS, has shown that average weekly earnings in the UK came in lower than expected in the three months to February, with no change in the speed at which they are rising, boosting hopes that central bank the Bank of England, or BoE, could be poised to cut interest rates next month.

The current interest rate is 4.5 percent but at the next meeting of the bank's Monetary Policy Committee, or MPC, on May 8, it is anticipated that it could be cut to 4.25 percent.

One of the BoE's economic targets is to reduce inflation, which is currently at 2.8 percent and in a downward pattern, to 2 percent, and wage rise speed is a potential fuel for inflation, which is a reason why the slacking of pace will be welcomed.

"Big picture, the MPC has the green light to cut bank rate in May," said Sanjay Raja, chief UK economist at Deutsche Bank. "Trade uncertainty remains rife. And slack in the labor market is emerging."

The number of employees fell by 78,000 in March, the biggest drop since early in the pandemic, and vacancies were also reduced to pre-COVID levels for the first time in nearly four years.

This comes before companies have to factor in changes to national insurance contributions, announced by Chancellor of the Exchequer Rachel Reeves last fall, which came into effect earlier this month and whose impact has yet to be felt. They will see employers' contributions rise from 13.8 percent to 15 percent, and also be applicable to salaries from a lower threshold.

"The looming hike in employers' taxes in April is very likely to have persuaded employers to hold back on hiring," Sarah Coles, head of personal finance at financial services company Hargreaves Lansdown, told the BBC.

When the announcement about national insurance contributions was made last year, Reeves said she was "not immune" to criticism from employers who would feel the impact, "but we've got to raise the money to put our public finances on a firm footing".

Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales, told The Guardian newspaper that when its members were asked for their verdict on the first quarter of the year, a survey revealed a sharp drop in business confidence.

This, he said, indicated that, so far, it had been a "pretty harrowing" year for the UK economy, "as accelerating anxiety over future sales performance, April's eye-watering tax hike and US tariffs helped push business sentiment into ominous territory".

"The mood music on the economy is turning increasingly sour and with forward-looking indicators of sales and employment activity weakening, things may get worse before they get better," Thiru added.

[email protected]