UK Unemployment is on the Rise – What You Need to Know
Fresh Numbers from the Office for National Statistics (ONS)
In the last quarter ending March, the UK’s unemployment rate nudged up from 4.4 % to 4.5 %. It’s a small change, but it signals a shift in the labour market that could matter for everyone.
Earnings vs. Inflation: The Real Story
One thing that’s gone down was the average regular earnings, falling to £5.6 k for the same period. But here’s the kicker: when you adjust for Consumer Prices Index (CPI) inflation, those wages are still trending higher by 2.6 % than the previous month.
The Budget’s Ripple Effect
The Autumn Budget has forced a slew of changes that are having tangible impacts:
- From April 1st, National Insurance Contributions (NIC) jumped by a whopping 15 %.
- Employers are tightening their belts—pay rises are on hold.
- Many companies are eyeing redundancies for the near future.
Why It Matters to You
These shifts aren’t just technical jargon. They’re the reason your neighbour might face a pay cut or a lay‑off, and why you might find your next job listing slimmer than you expect. It’s all part of a wider pattern that includes the rising minimum wage and increased taxes on businesses.
Bottom Line
Unemployment is creeping up, wages are easing but still climbing when inflation is factored in, and the Budget’s power‑shift means fewer perks for workers. Keep your ears open and your CV polished—you’ll want to be ready for whatever comes next.
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Why the job market’s heating up
Professor Joe Nellis, the economic guru behind MHA accountancy, warned that the UK is swimming in a tight labour market. Unemployment is low and wages are soaring – a 5.6% rise in earnings shows workers are earning way more than the price of goods. “This keeps the inflation spark lit,” he said, and that’s something the Bank of England can’t ignore.
Wage growth at a cross‑road
- High wage growth is a double‑edged sword: it boosts earnings but also fuels inflation.
- The Monetary Policy Committee is already in a split‑person conflict about whether to raise or cut rates.
- If wages keep climbing, the committee will have to wrestle with the risk of tipping the economy into a downturn.
Vacancies taking a hit
Nellis highlighted that job openings have been falling since midway through 2022, and the trend continued into the last quarter of 2024. From February to April, the UK saw a drop of 131,000 vacancies—a 14.7% decrease compared to the same period a year earlier.
Costs and confidence on the downhill track
- Rising employment costs like National Insurance contributions and the National Living Wage are squeezing businesses.
- Trade uncertainty is knocking customers’ confidence and making companies hesitant to hire.
- The Prime Minister may have snagged a few tariff wins on specific goods, but the fight to protect UK exports is far from over.
