Unemployment rises as vacancies fall, says ONS
Business@inews.co.uk
Wages have slowed as unemployment rose for the first time since last July, the latest figures show.
The unemployment rate went up to 3.9 per cent in the three months to January, from 3.8 per cent in the previous three months, the Office for National Statistics (ONS) said.
Vacancies continued to fall while redundancies rose, in clear signs the UK economy was starting to respond to high interest rates.
Average regular pay growth, excluding bonuses, fell to 6.1 per cent in the period, down from 6.2 per cent in the three months to December and the slowest growth for over a year.
More than a fifth of adults in the UK were economically inactive – not actively looking for work – in the final months of 2023, say official figures.
The UK’s economic inactivity rate was 21.8 per cent between November and January, higher than a year earlier.
Liz McKeown, of the ONS, said: “Recent trends in the jobs market are continuing, with earnings, in cash terms, growing more slowly than recently, but thanks to lower inflation, real-terms pay continues to increase.”
She said job vacancies continued to fall although the total remains more than 100,000 above its prepandemic level.
“Over the last year, there was little change in the proportions of people who are employed, unemployed, or neither working nor looking for work, though the overall number of people in work is still rising.”
Chancellor Jeremy Hunt said: “Our plan is working. Even with inflation falling, real wages have risen for the seventh month in a row. And take-home pay is set for another boost thanks to our cuts.”
Paula Bejarano Carbo, an economist at the National Institute of Economic and Social Research, said: “While these figures remain high by historical standards, allowing households to regain some of the purchasing power lost during the post-Covid period of high inflation, wage growth continues to soften.”
Tony Wilson of the Institute for Employment Studies said: “The jobs figures show that the labour market remains pretty subdued.”
Employment is “broadly flat”, he said, but there are fewer people in work because there are more people outside the labour force altogether – not looking, or not available, for work. In all, there are well over half a million more people out of work than before the pandemic began.
“This is being driven by more young people and older people outside the labour force, and in particular because of more people reporting long-term health conditions that stop them from working.
“In our view, this is holding back the recovery as the economy is continuing to create jobs, with nearly a million unfilled vacancies reported.”