ONS data

Unemployment rate leaps to highest in two years

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Unemployment is rising

Unemployment has unexpectedly jumped to its highest level for two and a half years, in what will be seen as a further blow to the Conservative party.

The rate climbed to 4.4% in February to April, the highest since September 2021. Between February and April 2024, Scotland’s unemployment rate estimate (16+ years) was 4.7%.

The Office for National Statistics (ONS) also said there was another increase in the inactivity rate, with 22.3% of working age people across the UK deemed not to be actively looking for work.

Wage growth remained strong, with regular pay rising at an annual pace of 5.9%, versus 5.7% in the three months to March and market expectations of 5.7%.

Earnings are continuing to increase faster than inflation, the rate at which prices rise.

“This month’s figures continue to show signs that the labour market may be cooling, with the number of vacancies still falling and unemployment rising, though earnings growth remains relatively strong,” the ONS said.

Danni Hewson, AJ Bell head of financial analysis, said: “There is a lot more data for the Bank of England to mull over between now and its June meeting, but a rate cut before the election is a long shot even if the odds are looking better for a late summer change.”

Ben Keighley, founder of AI recruitment platform Socially Recruited, said: “The only people celebrating these lacklustre figures will be the Government’s political opponents – for whom they offer plenty of economic ammunition.

“The headline figures don’t make encouraging reading for the Prime Minister. The number of people in work is flatlining, the employment rate is down and unemployment is up – both compared to the last quarter and to this time last year.

“Fragile business confidence continues to take its toll on job creation, and the number of vacancies across the UK has slipped back for the 23rd month in a row.

“However this picture varies a lot by sector, and some industries are recruiting hard but suffering from a lack of high-quality candidates. 

“Fierce competition for labour is driving pay rates upwards as sought-after candidates are offered lucrative salaries to prize them away from their current employer. While the average rate of regular pay growth is 6%, in the most competitive sectors it can be much higher.

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