MNI BRIEF: UK Unemployment Will Peak At 5.4% - NIESR

UK unemployment will peak at 5.4%, the National Institute of Economic and Social Research said in its quarterly forecast on Wednesday, as it expects 50 basis points of further cuts to Bank Rate this year.

"We expect that continued cooling in labour market activity will dampen pay growth" and inflation, it said, and inflation is expected to return to 2% "on a lasting basis from the second quarter of this year.

"The UK economy is "closer to normal than at any point in the last decade," Director David Aikman said on Tuesday at a press conference, in spite of the difficult fiscal picture. (see MNI INTERVIEW: UK Pay Deals To Cluster Near 3% in '26 -Attwood )