LONDON, March 20, 2025 (BSS/AFP) - Britain's unemployment rate steadied at the start of the year, official data showed Thursday, as the Bank of England prepares to freeze its main interest rate as inflationary pressures persist.

The unemployment rate stood at 4.4 percent in the three months to the end of January, the Office for National Statistics (ONS) said in a statement, unchanged from the final quarter of 2024.

It came ahead of the Bank of England's rate decision due at 1200 GMT, when it is widely expected to hold borrowing costs at 4.5 percent rather than trimming it at a time of elevated wages growth.

The ONS added that average regular earnings growth remained at 5.9 percent in the three months to the end of January.

Concerns over inflationary pressures is offsetting worries about stagnant UK economic growth.

With "wage growth stuck in the 5.5-6.0 percent range, we doubt the Bank of England will cut interest rates" on Thursday, said Ruth Gregory, deputy chief UK economist at Capital Economics, a research group.

The BoE decision is due after the US Federal Reserve on Wednesday kept rates unchanged and warned of increased economic uncertainty as it seeks to navigate an economy unnerved by President Donald Trump's stop-start tariff rollout.

Policymakers voted to hold the US central bank's key lending rate at between 4.25 percent and 4.50 percent.

They also cut their growth forecast for this year and hiked the inflation outlook, while still pencilling in two rate cuts this year -- in line with their previous forecast in December.

The Bank of Japan also paused on rates and warned about the economic outlook in a monetary policy decision Wednesday.

This contrasted with the European Central Bank, which earlier this month cut borrowing costs to boost a struggling eurozone economy.

However, the ECB suggested that easing could be near an end as it warned of "rising" economic uncertainty, while noting a planned colossal spending boost for Germany's defence and infrastructure that risks a spike to inflation.

In Britain, the BoE last month halved its forecast for the country's total output this year, blaming global risks amid US tariff threats and deteriorating UK business confidence.

That came as the central bank led by governor Andrew Bailey cut in February its key interest rate by a quarter point, the third such reduction in six months.

That eased slightly the pressure on the UK government, which is struggling with tight public finances. 

Prime Minister Keir Starmer's Labour administration this week announced contested cuts to disability welfare payments, hoping to save more than œ5 billion ($6.5 billion) by 2030 as it looks to shore up Treasury coffers.