UK Unemployment Rises to 4%

There are signs of a softening in the UK labour market with news that unemployment for March to May 2023 increased by 0.2 percentage points to 4% of the labour force.

In part, the rise in unemployment is due to more people re-entering the labour market in search of work – perhaps a response to the continuing cost-of-living crisis.

Here are the key UK numbers:

• Employment: 33.05 million (up 190,000 on year)
• Employment rate: 76% of population of working age
• Unemployment: 1.37 million
• Unemployment rate: 4% (up 0.2%)
• Economic inactivity: 20.8% (down 0.4%)
• Job Vacancies: 1.03 million (down 84K over last 3 months)

Larry Elliott analyses the latest labour market data and notes that whilst rising unemployment and slowing jobs growth might not be enough to offset the fact that pay is rising at an annual rate of 7.3%, the highest since modern records began.

Even though real pay is still - remarkably - falling, it seems as though the Bank of England is set to increase interest rates even further in the weeks ahead as it seeks to choke inflation.

Please read: UK interest rates likely to rise again despite slowing labour market (Guardian)