Autumn Budget Unlocks Unemployment Surge as Wage Growth Holds Still

UK Labour Market Snapshot: April 2024

Key Takeaway

The employment rate holds steady at 75.1% for the first quarter of the year, a small bump from March’s 75.0%.

What the Numbers Reveal

Unemployment sits at 4.6%—a notch above March’s 4.5% and in line with market forecasts.
Economic Inactivity falls slightly to 21.3% from 21.4% in the previous quarter.
Annual Total Earnings Growth slows to 5.3%, dipping from 5.5% and just meeting expectations of 5.4%.

Expert Insight

Isaac Stell, Investment Manager at Wealth Club, muses:
“The UK labour market feels like a crossroad, with unemployment creeping up to its highest rate since July 2021. Wage growth, while still outpacing inflation, is also slowing.
Businesses are juggling rising national insurance and minimum wage expenses—unsurprisingly, many are trimming staff to stay afloat.
These cost pressures may soon ripple into consumer spending, as people tighten their wallets amid growing uncertainty. With potential tax hikes looming in autumn, investment plans could be put on hold. The outlook for UK PLCs remains shaky.”

Bottom Line

While the job market appears stable on paper, the subtle uptick in unemployment and the drag on wage growth hint at an economy treading on a razor’s edge. Investors and consumers alike should brace for possible slowdowns as businesses recalibrate to fresh fiscal challenges.