Rachel Reeves has come under fire again following the release of damning new unemployment figures — a day after her huge U-turn on winter fuel payments. Latest statistics from the Office for National Statistics (ONS) show the UK’s jobless rate has reached its highest level for nearly four years.
Pressure continues to mount on the Chancellor, with political opponents blaming the concerning unemployment figures on her “jobs tax”. The unemployment rate increased to 4.6% in the three months to April, up from 3.5% in the three months to March, coinciding with companies facing a rise in the minimum wage and a national insurance hike, which Ms Reeves had earlier announced in October. So what do you think? Vote in our poll and join the debate in the comments section. Can’t see the poll below? Click here.
The ONS continues to caution over the reliability of the unemployment statistics.
Pay growth for British workers also eased by more than expected, official figures show, as employers get to grips with rising staff costs.
The ONS also said average regular earnings, excluding bonuses, fell sharply to 5.2% in the three months to April, from 5.5% in the previous three months and the lowest since the third quarter of last year.
While this is still outstripping inflation, up by 2.1% with Consumer Prices Index inflation taken into account, it was lower than predicted, with most experts pencilling in a fall to 5.3%.
ONS figures also showed job vacancies fell by 63,000 to 736,000 in the three months to May — the lowest since April 2021.
Liz McKeown, ONS director of economic statistics, said: “Feedback from our vacancies survey suggests some firms may be holding back from recruiting new workers or replacing people when they move on.”
Both the Conservatives and Liberal Democrats have blamed the new figures on Ms Reeves’ changes to national insurance and minimum wage.
Shadow Business Secretary Andrew Griffith said: “It is disappointing but no surprise that unemployment is up again.
“Businesses are still absorbing a £25 billion jobs tax but things are about to get even worse as Labour’s £5 billion unemployment bill hits businesses with higher regulation.”
Lib Dem treasury spokeswoman Daisy Cooper said: “These figures could not be a clearer signal to the Chancellor ahead of the spending review that the Government must change course.
“The Chancellor’s pig’s ear of a jobs tax is crushing the growth potential of our high streets and small businesses, pushing people out of work, and ramping up the benefits bill.”
Paige Tao, an economist at PwC UK, said businesses are “clearly feeling the squeeze” of the increased costs and global tariffs.
However, despite the fall in pay growth, economists said earnings have so far remained robust, helped by the recent minimum wage rise.