UK unemployment rate hits highest level since 2021

Britain’s unemployment rate has climbed to its highest point since July 2021, according to new figures released on Tuesday by the Office for National Statistics (ONS).

The latest data showed that the jobless rate rose to 4.6 percent in the three months ending April, up from 4.5 percent in the previous quarter.

This increase comes in the wake of economic challenges tied to a business tax rise introduced by the Labour government in its inaugural budget last October, as well as a new 10-percent baseline tariff imposed by US President Donald Trump on British goods.

ONS Director of Economic Statistics, Liz McKeown, confirmed that the labour market continues to weaken, noting a noticeable drop in payroll numbers. “Feedback from our vacancies survey suggests some firms may be holding back from recruiting new workers or replacing people when they move on,” she said.

Economists believe the new jobless data, alongside signs of slowing wage growth, strengthens the likelihood of further interest rate cuts by the Bank of England. Ruth Gregory, deputy chief UK economist at Capital Economics, predicted rates could be cut deeper than markets currently expect, possibly falling to 3.50 percent by next year.

The Bank of England made its first cut this May, lowering rates by 0.25 percent to 4.25 percent. Following Tuesday’s report, London’s stock market opened stronger, though the pound took a slight hit as investors adjusted expectations for additional rate reductions.