Britain jobless rate surged to its highest level for nearly four years and pay growth for UK workers eased by more than expected as employers faced surging staff costs, official figures have shown.<\/p>\n
The Office for National Statistics (ONS) said average regular earnings, excluding bonuses, fell sharply to 5.2% in the three months to April, from a revised 5.5% in the previous three months and the lowest since the third quarter of last year.<\/p>\n
While this is still outstripping inflation, up by 2.1% with Consumer Prices Index inflation taken into account, it was lower than predicted, with most experts pencilling in a fall to 5.3%.<\/p>\n
The rate of unemployment also jumped to 4.6% in the three months to April, up from 4.5% in the three months to March and the highest level since the three months to July 2021, although the ONS continues caution over the reliability of the statistic.<\/p>\n
It coincided with firms facing a hike in national insurance contributions in April, which had been announced in October\u2019s budget, as well as a rise in the minimum wage.<\/p>\n
The figures also showed vacancies tumbled by 63,000 to 736,000 in the three months to May \u2013 the lowest since April 2021 \u2013 while payroll data revealed the biggest drop for five years last month, down 109,000 to 30.2 million.<\/p>\n
This followed a revised 55,000 drop in payrolled workers between March and April.<\/p>\n
Liz McKeown, ONS director of economic statistics, said: \u201cThere continues to be weakening in the labour market, with the number of people on payroll falling notably.<\/p>\n
\u201cFeedback from our vacancies survey suggests some firms may be holding back from recruiting new workers or replacing people when they move on.\u201d<\/p>\n
There are fears that the \u201cAwful April\u201d rise in staff costs for firms will send unemployment levels soaring, with some firms already moving to cut jobs ahead of the tax increase.<\/p>\n
Paige Tao, economist at PwC UK, said: \u201cWith rising national insurance costs, a higher minimum wage and escalating global tariffs all contributing to heightened cost pressures for employers, today\u2019s figures show that businesses are clearly feeling the squeeze.\u201d<\/p>\n
The Institute of Directors raised concerns that \u201cthe business case for hiring new staff has been dealt a series of blows\u201d by rising staff costs and upcoming changes to employment law.<\/p>\n
Despite the fall in pay growth, economists said earnings so far remained robust \u2013 buoyed by the recent minimum wage rise.<\/p>\n
The Bank of England will be weighing this up carefully against clear signs of a weakening jobs market, according to economists.<\/p>\n
\u201cThe labour market looks in worse shape in May, which could tip the Monetary Policy Committee (MPC) into cutting rates again in August,\u201d said Rob Wood at Pantheon Macroeconomics.<\/p>\n
Matt Swannell, chief economic adviser to the EY Item Club, said he believed a cut in June remained unlikely, but that rates may come down again in August.<\/p>\n
\u201cToday\u2019s data is likely to reinforce the view that underlying inflationary pressures are cooling, but with pay growth still far above the rate consistent with inflation returning sustainably to 2%, most of the MPC will still want to act cautiously to guard against sticky inflation,\u201d he said.<\/p>\n
Investec economist Philip Shaw said the cooling jobs market would likely \u201creduce the MPC\u2019s concerns about the threat of \u2018inflation persistence\u2019\u201d.<\/p>\n
He is pencilling in a cut to 4% in August and a further cut to 3.75% in November.<\/p>\n","protected":false},"excerpt":{"rendered":"Britain jobless rate surged to its highest level for nearly four years and pay growth for UK workers…\n","protected":false},"author":2,"featured_media":173100,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3090],"tags":[51,1700,29199,21528,15165,24164,71823,16,15],"class_list":{"0":"post-173099","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-jobless-rate","11":"tag-labour-market","12":"tag-office-for-national-statistics","13":"tag-ons","14":"tag-staff-costs","15":"tag-uk","16":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114659434483234230","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/173099","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=173099"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/173099\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/173100"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=173099"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=173099"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=173099"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}