Britain's unemployment rate has climbed to its highest level in four years, while workers face a fresh blow from slowing wage growth. The troubling figures highlight mounting pressure on the UK labour market as economic uncertainty continues to grip the nation.
The Office for National Statistics (ONS) revealed that unemployment increased to 4.7% in the three months to May, up from 4.6% in the previous quarter. This marks the highest jobless rate since June 2021, when the country was still recovering from the pandemic's economic impact.
Wage growth hits three-year low
Workers are also feeling the squeeze as average earnings growth, excluding bonuses, slowed to 5% in the period to May. This represents the lowest level of pay growth for almost three years, adding to concerns about living standards across the country.
The deteriorating employment picture comes just days after Bank of England Governor Andrew Bailey warned that the central bank stands ready to make larger interest rate cuts. Bailey indicated this would happen if officials observe further weakening in the job market.
Labour market continues weakening trend
ONS director of economic statistics Liz McKeown said the labour market continues to weaken, with the number of employees on payroll falling again. However, she noted that revised tax data shows the decline in recent months is less pronounced than previously estimated.
"Pay growth fell again in both cash and real terms, but both measures remain relatively strong by historic standards," McKeown added. The figures suggest that whilst conditions are deteriorating, wage growth still exceeds historical averages despite the recent slowdown.
(PA/London) Note: This article has been edited with the help of Artificial Intelligence.
