Financial News: UK Jobless Rate Climbs, Payroll Employment Declines

UK Jobless Rate Climbs, Payroll Employment Declines

05/16/2023 - 08:18:00 (RTTNews)

(RTTNews) - The UK unemployment rate rose slightly and payroll employment declined for the first time in more than two years as the economic slowdown started to bite the labor market.

The jobless rate rose to 3.9 percent in the three months to March from 3.8 percent in the preceding month, data published by the Office for National Statistics showed on Tuesday.

This was in contrast to economists' forecast of the rate stagnating at 3.8 percent.

The increase in unemployment was largely driven by people unemployed for over twelve months.

Payroll employees for April registered a monthly decrease of 136,000 from March to 29.8 million. This was the first decline since February 2021.

Moreover, the number of vacancies declined 55,000 sequentially to 1.08 million in the three months to April. Vacancies have been falling for the tenth consecutive period as firms held back recruitment due to economic pressures.

During January to March, average total pay including bonuses posted an annual growth of 5.8 percent as expected. Excluding bonuses, average earnings gained 6.7 percent, which was weaker than economists' forecast of 6.8 percent.

Due to labor disputes, 556,000 working days were lost in March, up from 332,000 in February, the ONS said.

In April, the claimant count rose slightly to 4.0 percent from 3.9 percent in March. The number of people claiming benefits increased by 46,700 from a month ago.

Last month's surprisingly strong wage growth was almost a key factor behind <a href=https://www.rttnews.com/3363551/bank-of-england-raises-rate-for-12th-session-signals-more-hikes.aspx target=_blank >Bank of England</a>'s rate hike decision, ING economist James Smith said. But there is nothing in the latest report that screams a need to keep interest rates hiking, the economist added.

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