Hopes that the Bank of England will cut interest rates next month and give borrowers some much-needed breathing room have been 'dented' after the release of official unemployment statistics - which shows joblessness has reached its highest point in the last year, increasing from 4.2 to 4.3 per cent.
But, unusually, pay rises have continued alongside this contraction in the jobs market with wages outstripping the Consumer Price Index (CPI) inflation, which is currently at 2.4 per cent.
While the number of people out of work has increased by 85,000, wages continued to rise by an average of six per cent in the first quarter of the year.
This poses challenges for the Bank of England in its efforts to control inflation. The Bank is closely monitoring the jobs market and wage growth as it aims to bring CPI back to its 2 per cent target.
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