UK Unemployment Climbs to 4.5%, Highest in Nearly Four Years
For the first time since August 2021, the United Kingdom’s unemployment rate has climbed to 4.5 percent, according to new data released Tuesday by the Office for National Statistics (ONS).
The rise, up from 4.4 percent in the three months to February, adds to growing concerns about a cooling labour market. The ONS noted a drop in payroll employment during the first quarter, a trend likely worsened by the twin pressures of rising business costs and global trade tensions.
The figures precede the implementation of a higher business tax introduced in April under the Labour government’s inaugural budget, as well as a 10-percent US tariff imposed by President Donald Trump on UK exports last month.
“The broader picture continues to be of the labour market cooling, with the number of employees on payroll falling in the first quarter of the year,” said Liz McKeown, Director of Economic Statistics at the ONS. She noted that while wage growth has slowed slightly, it remains relatively robust across both public and private sectors.
Analysts believe the latest data could prompt the Bank of England to ease monetary policy further. The central bank has already cut interest rates twice this year and is expected to continue at a pace of one cut per quarter.
Ruth Gregory, Deputy Chief UK Economist at Capital Economics, said the weakness in jobs is beginning to reflect businesses’ response to new cost burdens.
“Further softening in employment in April suggests businesses continued to respond to the rise in business taxes and the minimum wage by reducing headcount,” she noted.
