Uncertainty lurks over job security in the United Kingdom as its unemployment rate rose higher than expected in February.

This is as employers have begun to downsize in response to high interest rates.

The Office for National Statistics said the unemployment rate increased to 4.2 percent in February from 3.9 percent, well above the 4 per cent expected by City economists, according to the Economic Times.

“We are now seeing tentative signs that the jobs market is beginning to cool,” ONS Director of Economic Statistics, Liz McKeown said.

The ONS added that average regular pay growth, excluding bonuses, plunged to 6.0 per cent from 6.1 per cent.

However, taking into account Britain’s annual inflation rate during the period, real wages rose by only 2.1 percent.

“Easing pressure in the labour market keeps the Bank of England on track for a summer rate cut,” commented Yael Selfin, chief economist at KPMG UK.

“The slight easing in regular pay growth will bring some comfort for the BoE which has relied on the pay data as a key gauge of domestic inflationary pressure.

“Moreover, the rise in unemployment rate paints a picture of a less tight labour market.”

The Bank of England in March held its key interest rate at a 16-year high of 5.25 percent, as overall UK inflation remains stubbornly above its 2.0-percent target.

Inflation fell to a near two-and-a-half-year low of 3.4 percent in February, easing the nation’s cost-of-living crisis, said the Economic Times.