Unemployment rises again in latest Government figures

The rate of UK unemployment rose to 4.4% in the three months to April, up from 4.3% in the previous three months, the Office for National Statistics has said. UK average regular earnings growth remained unchanged at 6% in the three months to April and lifted 2.9% after taking Consumer Prices Index inflation into account, the Office for National Statistics said.

George Sweeney (DipFA), financial advisor at personal finance site finder.com said: "The latest figures from the ONS show wage growth excluding bonuses remains level at 6%. This was what some economists were expecting.

"Although it’s positive for people’s wages and could help us continue to crawl away from the recent recession, this continuing growth doesn’t bode well for the possibility of incoming rate cuts from the Bank of England (BoE).

"We’ve seen inflation fall back to manageable levels, but the BoE will be looking at all the data available before making a decision on whether to lower the base rate. The key question is going to be how much stock the Monetary Policy Committee put into wage growth data compared to inflation and figures like the unemployment rate. The European Central Bank (ECB) cut rates to 3.75% at the end of last week, but the next US inflation reading and Fed Funds rate decision could be more influential for the UK. The jury’s out on whether we’ll follow moves from the EU, the US, or forge our own path forward."

The latest increase defied expectations for the jobless rate to remain unchanged and sees it reach the highest level since July to September 2021.

Vacancies also dropped sharply once again, down 12,000 to 904,000 in the three months to May, marking the 23rd fall in a row.

But the figures showed regular earnings growth remained unchanged at 6% in the three months to April and continued to outstrip price rises – up 2.9% when taking Consumer Prices Index (CPI) inflation into account, which is the highest since the three months to August 2021.

The ONS said: “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.”