Wage growth has remained strong, the latest official figures show, as the Bank of England mulls its interest rate decision.

Wages – excluding bonuses – grew 5.9% in the three months to January, the same amount as a month earlier, data from the Office for National Statistics (ONS) showed.

Meanwhile, growth in average weekly earnings, including bonuses, fell to a surprise 5.8%. Economists polled by the Reuters news agency anticipated a 5.9% rise.

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It means wage growth is still high and well above the rate of overall price rises. Inflation stood at 3% in January.

Both private and public sectors have seen rises, the ONS said, describing the growth as “strong”.

It comes as the Bank of England is widely expected to hold interest rates at 4.5% at its meeting today, in part because of the inflationary impact of wage growth.

Wage increases have surpassed the level of inflation since July 2023, something that could stop the interest rate setters at the Bank from cutting rates at future meetings.

Unsurprising unemployment

There was little change in the rate of unemployment which remained at 4.4%.

The labour market picture is “relatively unchanged”, the ONS’s director of economic statistics, Liz McKeown said.

The number of employees on payrolls is “broadly flat” with little growth seen over the last year, she added.

The ONS, however, has advised caution in interpreting changes in the monthly unemployment rate due to questions over the reliability of the figures.

The exact number of unemployed people is not known – partly because people don’t answer the phone when the ONS calls.

Some good news for government

In good news for the government, data also released today showed a fall in the number of people neither in nor looking for work.

Welfare reforms announced this week aim to bring down the number of people classed as “economically inactive“.

But the numbers have already gone down.

ONS figures showed the economic inactivity rate for people aged 16 to 64 years was around 21.5% in the three months to January, below the same time last year as well as the preceding three months.

British banks should abandon outdated ethical standards and increase lending to domestic defence manufacturers in a “patriotic” effort to ensure the UK can meet its security needs, defence suppliers have told Sky News.

The defence industry has long complained that environment, sustainability and governance (ESG) standards, intended to guide business impact on society, have prevented small and medium-sized companies (SMEs) raising finance.

With the government promising to increase defence spending to 2.5% of GDP, and the chancellor keen that SMEs in the sector should contribute increased growth, the industry believes ESG rules could hold British companies back.

Lizzie Jones of Supacat, which manufactures military vehicles used by special forces and infantry, told Sky News: “We have absolutely felt the disinterest from banks to invest in the defence industry, which has been really hard to deal with over the last few years.

“We’re hoping that the tide is beginning to change, and that actually some of the patriotic feelings that we need the defence industry, particularly right now, will help persuade the banks that investing in defence industries is good for UK growth.”

The call for support from the defence industry comes as European military chiefs meet in London to discuss operational aspects of a proposed peacekeeping force in Ukraine.

Donald Trump’s return to the White House, and his demand that European NATO partners scale up defence and lead any security guarantees for Ukraine, has forced a re-examination of defence priorities.

Rachel Reeves has sought to link increased spending to her growth agenda, and defence will form part of the industrial strategy due later this year.

Earlier this month a group of Labour MPs, and members of the defence select committee, called on banks to end “anti-defence” ESG guidelines in light of the US retreat from European security, and the need to increase support for Ukraine.

Improved access to finance is one of several demands from defence suppliers large and small, as the industry prepares for increased demand.

Certainty of contracts, a reduction in Ministry of Defence red tape, and access to cheap energy, skilled workers and critical minerals are all also required if the UK is to enjoy “sovereign capability” – the ability to build and deploy its own equipment, weapons and systems.

The call for a re-examination of ethical standards was echoed by one of the largest defence suppliers, Leonardo UK, the British arm of an Italian-listed multinational that manufactures helicopters and electronic warfare technology.

Chief executive Clive Higgins told Sky News: “The ESG agenda was really impacting small to medium enterprises where no banking was effectively taking place, and individuals couldn’t go get a bank account because they were in the defence sector.

“We’ve seen a real, really proactive response from the government over the last 12 months. I think we’re starting to see a shift in the tragic events going on in Ukraine, which helps people recognise the importance of defence at home, because that ensures we can enjoy the freedoms that you and I take for granted each day.”

The UK Sustainable Finance Association, which represents a number of major investors and pension funds, rejected the argument that the defence industry is “underinvested”.

Chief executive James Alexander said: “The notion that defence firms’ low valuations and struggles for finance is because of ‘ESG’ criteria is nonsense.

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“The UK’s ‘ESG’ (or sustainable finance) regulations at no point prohibit defence investments. While some values-based (or ‘ethical’) investors may opt against investing in defence companies, they represent a small proportion of the financial system.

“Many financial institutions, including mainstream, sustainable investors, do invest in defence. Most critical to defence companies’ prospects, though, is government spending, as highlighted by the rise in several defence stocks this year, as the UK and European allies have understandably announced increases in defence spending.”

The Financial Conduct Authority said last month that its ESG reporting rules contain nothing “that prevents investment or finance for defence companies”, implying that divesting from or avoiding defence is a choice for institutions and their customers.

A sub-postmaster made famous for being portrayed in the ITV Post Office drama is taking the state-owned body and Fujitsu to court.

Lee Castleton has become the first individual former sub-postmaster to launch High Court action against the Post Office and the maker of the Horizon faulty computer software.

It was the Horizon accounting software created by Fujitsu that wrongly generated financial shortfalls, making it appear that Mr Castleton owed the Post Office money.

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Mr Castleton wrongfully had a judgment issued against him in 2007 for taking £25,000.

He is bringing the challenge against the organisations after it emerged Fujitsu withheld its error log during the prosecution.

Had it been included it would have been clear Horizon contained bugs, errors and defects.

This failure to disclose means the judgment against him was obtained by fraud, he will argue.

“We also believe the judgement was obtained by fraud in that the Post Office and Fujitsu knew perfectly well that the Horizon system wasn’t working properly,” his solicitor Simon Goldberg said.

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The Post Office and Fujitsu maintained there were no errors with Horizon until 2019.

While prosecutions against sub-postmasters have been overturned en masse through one-off legislation, the civil judgment against Mr Castleton was not captured by the law and still stands.

Uncovered fraud

The revelation that information was withheld from Mr Castleton during his trial came out during the public inquiry into the Post Office Horizon scandal.

The inquiry was established to create a clear account of the implementation and failure of the Fujitsu-created software.

As part of the scandal, more than 700 sub-postmasters were prosecuted for theft and false accounting.

Many more, like Mr Castleton, were declared bankrupt as they struggled to plug the imagined shortfalls.

The judgment also destroyed his business, livelihood, and reputation in his community.

It had a devastating long-term impact on his and his family’s health.

He was awarded an Order of the British Empire (OBE) in the New Year’s honours list.

The Post Office and Fujitsu have been contacted for comment.