UK Unemployment Rises Amidst a Weakening Job Market
The UK's unemployment rate has risen to its highest level since 2021, with a weakening job market and declining job vacancies. While wage growth shows signs of slowing, concerns remain about the overall economic situation and the need for enhanced employment support.
Unemployment Rate Climbs to Highest Level Since 2021
The number of unemployed individuals in the UK increased by 138,000 in the three months leading up to April, signaling a weakening job market. The Office for National Statistics (ONS) reported a rise in the unemployment rate from 4.3% to 4.4%, the fourth consecutive increase and the highest level since September 2021.
Long-Term Illness and Wage Growth Trends
The number of people unable to work due to long-term illness also reached a record high of 2.83 million, increasing by 55,000. Despite the substantial increase in the national minimum wage, affecting over 3 million workers, there are indications that wage growth may have peaked.
Signs of Slowing Wage Growth
Annual growth in average earnings for all workers remained unchanged at 5.9% in the three months to April. Private sector wage growth eased from 6.1% to 5.8%. In April alone, overall earnings increased by 5.5% compared to the same month in 2023, down from 6.4% in the year to March.
Job Vacancies Decline and Employment Falls
The ONS reported a continued decline in job vacancies, with 12,000 fewer unfilled positions in the three months to May. Early estimates for May also showed a decrease of 3,000 employees, although the total remained 167,000 higher than the previous year.
Calls for Enhanced Employment Support and Economic Recovery
Experts and policymakers have expressed concerns about the rising unemployment and economic inactivity rates. Calls have been made for increased employment support, particularly for disabled individuals, and for measures to address the significant gap in average earnings compared to pre-financial crisis trends.
