UK (Parliament Politics Magazine) – UK unemployment hits 4.5%, its highest in almost four years, with job vacancies and wage growth slowing due to higher employer costs.
As reported by The Guardian, official figures reveal a surge in UK unemployment, reflecting a slowdown in the jobs market.
ONS report on UK unemployment and job vacancies
The Office for National Statistics revealed UK unemployment hit 4.5% in Q1, a 0.2% rise from the previous quarter.
The ONS reported a 5.3% drop in UK job vacancies during the quarter ending in April, highlighting continued weakness in the labour market.
The UK recorded 761,000 job openings from February to April, marking a yearly decline of 131,000. The construction sector saw the sharpest drop.
Regular earnings growth eased to 5.6% in Q1, down from 5.9% in the previous quarter, reflecting a slowdown in pay momentum.
Rising job cuts and pay stagnation affecting the UK market
A modest dip in wage growth could offer some relief to Bank of England officials, who reduced interest rates to 4.25% last week amid ongoing concerns about pay strength.
A drop of 47,000 payrolled jobs, or 0.2%, was recorded between February and March, indicating continued softening in the UK labour market.
Policymakers remain uneasy as the economic inactivity rate, though slightly down to 21.4%, still exceeds pre-Covid levels.
What did Liz McKeown say about recent wage growth trends?
Liz McKeown, ONS director of economic statistics, stated, “Wage growth slowed slightly in the latest period but remains relatively strong, with public and private sectors now showing little difference.”
She added, “The broader picture continues to be of the labour market cooling, with the number of employees on payroll falling in the first quarter of the year. The number of job vacancies has also fallen again, with the rate of decline increasing in the last few months.”
What did Alison McGovern say about wage growth and the need for more workers?
Alison McGovern Minister for Employment, said, “Real wages are growing with around 200,000 more people into work since the publication of our Get Britain Working plan.”
She added, “But we know that the Government’s Plan for Change needs more workers – in every part of our country. That’s why we will continue to change Jobcentres, invest in British industry, and get help to those who need it until everyone who can work has got a decent job and a good income.”
What did Julia Turney say about the business challenges ahead?
Julia Turney, Partner and Head of Platform and Benefits, Barnett Waddingham said, “With employer National Insurance hikes now in effect and the Employment Rights Bill expected to progress over the summer, the months ahead will be a real test of how businesses manage the compounding pressures of cost and compliance.”
What did Nye Cominetti say about the UK labour market slowdown?
Principal Economist at the left-leaning think tank Nye Cominetti stated, “While recent UK data on growth has been encouraging, the labour market picture is a major worry.”
She added, “The recent rise in employer National Insurance may have accelerated this slowdown, with the number of hospitality jobs falling particularly sharply since the tax rise came into effect in April.”
How are Rachel Reeves’s NIC hikes and wage increases affecting UK jobs?
The Bank of England is closely monitoring the impact of Rachel Reeves’s £25bn employer NIC hike on jobs and salaries across the UK. The increase, implemented last month, coincided with a 6.7% hike in the national living wage, prompting employer groups to flag payroll cost pressures.
The ONS is under review over persistent issues in data accuracy, particularly in the Labour Force Survey, which has been affected by low response rates.