logo
UK unemployment rises to highest in nearly four years

UK unemployment rises to highest in nearly four years

The Guardian13-05-2025
The unemployment rate in the UK has risen to its highest level in almost four years, according to official figures, as the jobs market continues to slow.
The Office for National Statistics (ONS) said the rate was 4.5% in first three months of this year, up 0.2% on the previous quarter and the highest reading since summer 2021.
The higher level of unemployment was part of a slew of UK labour market data released on Tuesday that showed a slowdown amid increases to employer national insurance contributions (NICs) and the national living wage.
The number of vacancies in the economy was down 5.3% in the quarter to April, the ONS said. There were 761,000 job vacancies in the three months to April, a 131,000 drop on a year ago. The biggest decline in vacancies was seen in the construction sector.
Pay growth also weakened, with regular earnings up 5.6% in the three months to March, down from 5.9% in the previous three-month period.
Modestly weaker wage growth will reassure Bank of England policymakers, who cut interest rates by a quarter point last week to 4.25% but have expressed concern about the continued strength of pay.
And in another sign of a slowing labour market, the number of payrolled jobs declined, by 47,000, or 0.2%, between February and March.
The economic inactivity rate, which has been a consistent concern of policymakers, was slightly lower, at 21.4% of the working age population – though remains above the levels seen before the Covid pandemic.
Sign up to Business Today
Get set for the working day – we'll point you to all the business news and analysis you need every morning
after newsletter promotion
The Bank also been monitoring closely the impact on jobs and salaries of Rachel Reeves's £25bn increase in employer NICs. The rise, which took effect last month, came alongside a 6.7% increase in the national living wage, prompting some business lobby groups to warn about rising payroll costs.
The ONS is facing an independent inquiry into longstanding problems with the quality of its data, including the Labour Force Survey, which has been hit by collapsing response rates. The national statistician, Ian Diamond, stepped down last week, citing health concerns.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

EU backs potential counter-tariffs on 93 billion euros of US goods
EU backs potential counter-tariffs on 93 billion euros of US goods

Reuters

time29 minutes ago

  • Reuters

EU backs potential counter-tariffs on 93 billion euros of US goods

BRUSSELS, July 24 (Reuters) - The European Union's member countries voted on Thursday to approve counter-tariffs on 93 billion euros ($109 billion) of U.S. goods, which could be imposed should the bloc fail to reach a trade deal with Washington, EU diplomats said. The 27-nation bloc's executive European Commission had said on Wednesday its primary focus was to achieve a negotiated outcome with Washington to avert 30% U.S. tariffs that U.S. President Donald Trump has said he will apply on August 1. The Commission said it would press on in parallel with plans for potential countermeasures, merging two packages of proposed tariffs of 21 billion euros and 72 billion euros into a single list and submitting this to EU members for approval. No countermeasures would enter force until August 7. So far the EU has held back from imposing any countermeasures, despite Trump's repeated announcements of tariffs, the broadest of which have been postponed. EU member states authorised the first package of countermeasures in April, but these were immediately suspended to allow time for negotiations. The EU and United States appear to be heading towards a possible trade deal, according to EU diplomats, which would result in a broad 15% tariff on EU goods imported into the U.S., mirroring a framework agreement Washington struck with Japan. Trump would still need to take any final decision. Under the outlines of the potential deal, the 15% rate could apply to sectors including cars and pharmaceuticals and would not be added to long-standing U.S. duties, which average just under 5%. There could also be concessions for sectors such as aircraft, lumber as well as some medicines and agricultural products, which would not face tariffs, diplomats said. Washington does not, however, appear willing to lower its 50% tariff on steel. ($1 = 0.8501 euros)

Britain's pension crisis is about to get even worse
Britain's pension crisis is about to get even worse

Telegraph

time29 minutes ago

  • Telegraph

Britain's pension crisis is about to get even worse

The Government's review of pensions is asking some of the right questions. Top of the list is the age at which they should start to be paid. It is not a given that the state should fund the last third of someone's life, regardless of need. That is a choice, and a recent one. When the Old Age Pension began in 1909, it was paid from 70 and you had to have lived in the UK for 20 years and to be of 'good character'. It was means-tested, too – you needed to earn less than £21 a year to qualify. So, Liz Kendall, the Work and Pensions Secretary, is right to look first at the state pension age. And right to commission a report on the proportion of adult life spent in retirement. When the modern state pension was introduced in 1948, a 65-year-old could expect to receive it for just 13 years, about a sixth of their life expectancy. She is right, too, to investigate ways to boost pension savings – 8pc of earnings is not enough – and to broaden the number of people putting money aside for their retirement. Only half of working-age people are doing that, a fifth of the self-employed and fewer still of some ethnic minorities. That's not good. As ever, when it comes to pensions policy, there is also a have-cake-and-eat-it problem. The Government spends about 5pc of GDP on pensions – more than £120bn last year – but it persists with the fantasy that the amount paid to pensioners can rise into the future by the highest of earnings, inflation or 2.5pc. The triple lock is unaffordable. The unavoidable truth about pensions is that small changes in a range of unpredictable variables make a big difference when they are compounded over the decades that we now expect to live after we have stopped working. This is true for the good changes that government policy and personal choice can deliver. And for the bad ones that we can't do much about. That's why the Government is asking only some of the right questions. There are others it needs to address, all of which are difficult. The biggest pensions challenge may well be one that no one is talking about. This all became abundantly clear to me recently when I helped a colleague out with a deceptively simple question. He wanted to know what rate of investment return he needed to aim for in order to achieve the comfortable retirement he was hoping to enjoy. To answer that, I employed my pathetically rudimentary Excel skills to build a spreadsheet with a few variables that we could play with until we arrived at a plausible plan. I plugged in how much he had saved; how much he intended to put aside in future, and for how long; when he planned to wind down into semi-retirement and when he would stop completely; when he would take the state pension; and the return he would aim to achieve on his investments both before and after he stopped working. I ran the numbers from his current age of 52 until, with luck, he turns 90. Crucially, I had to make some quite big assumptions, the most important of which were that the triple lock would continue throughout his life and that the Bank of England would succeed in hitting its 2pc inflation target. By tweaking all these variables and assumptions, we were able to monitor their impact on the cumulative size of his pension pot. As you might expect, saving more for longer in an only moderately inflationary environment ended well. Working for a bit longer made a big difference. Accepting a lower income in retirement helped. None of this is rocket science, and probably doesn't require a Pensions Commission to confirm. That said, I was surprised by some of the things we discovered. One was the remarkable power of starting early. The principal reason that my colleague was pleasantly surprised by his required rate of investment return was that he had spent the previous 30 years studiously paying into his company pension, supported by a generous employer. The first additional question the Government needs to find an answer to is how to get young people engaged with their pensions. It may be boring, but it is not as boring as being old and poor. The second thing the spreadsheet taught us was the power of delay. Working just a few more years, even in a part-time capacity, can transform the arithmetic of our pension savings. Paying in for longer and taking out for less time, together with a few extra years of compound investment growth, is a magical combination. Find what you enjoy and keep doing it. But the biggest eye-opener for me was the devastating impact of even a modest uptick in inflation. A quick and easy way to make your money run out is to stop work and then try to maintain your standard of living by increasing the amount you draw down from your pension in line with rising prices. For my colleague, nudging up the assumed inflation rate from 2pc to 3pc was the difference between a £700,000 pension pot at the age of 90 and running out of cash completely a couple of years earlier. The pensions crisis that no one is talking about, therefore, is on the face of it nothing to do with pensions at all. Yes, more people need to save more, to start earlier and to carry on for longer. The Government has a role to play in encouraging all of those. But it, and the Bank of England, has an even bigger task. To keep inflation at a level where it doesn't blow our plans out of the water.

Euro zone business activity growth hits 11-month high in July, PMI shows
Euro zone business activity growth hits 11-month high in July, PMI shows

Reuters

time29 minutes ago

  • Reuters

Euro zone business activity growth hits 11-month high in July, PMI shows

LONDON, July 24 (Reuters) - Euro zone business activity accelerated faster than forecast this month, supported by a solid improvement in the bloc's dominant services industry and with manufacturing showing further signs of recovery, a survey showed on Thursday. HCOB's preliminary composite euro zone Purchasing Managers' Index, compiled by S&P Global and seen as a good guide to growth, rose to an 11-month high of 51.0 points from 50.6 in June. That was above the 50.0 mark separating growth from contraction and above expectations for 50.8 in a Reuters poll. "The euro zone economy appears to be gradually regaining momentum. The recession in the manufacturing sector is coming to an end, and growth in the services sector accelerated slightly in July," said Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank. For the first time in over a year, overall demand did not decline, though there was no expansion. The composite new business index came in bang on 50, its highest level since May 2024. The services PMI rose to 51.2 from 50.5, exceeding the Reuters poll forecast for a more modest lift to 50.7. Inflationary pressures eased with the services input and output prices indexes falling. The input prices index fell to a nine-month low of 56.7 from 58.1. Inflation was at 2.0% in June, official data showed earlier this month, right where the European Central Bank wants it. The ECB will hold policy steady later on Thursday, according to all 84 economists surveyed in a Reuters poll, while a small majority expect one more interest rate cut - most likely in September. A manufacturing PMI, which has been sub-50 for three years, climbed to 49.8 from June's 49.5, just ahead of the poll estimate for 49.7, while an index measuring output dipped slightly to 50.7 from 50.8. Although some of that activity was driven by completing past orders, factories did so at the slowest rate in around three years. The backlogs of work index rose to 49.0 from 47.1.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store