Unemployment Rate Reaches Four Percent
The Office for National Statistics (ONS) released official data indicating that the UK’s unemployment rate rose back to four percent in the three months leading up to the end of May. This increase follows a previous rate of 3.8 percent in the three months ending in April, marking the first time the rate reached four percent since the beginning of 2022. Analysts had anticipated that the unemployment rate would remain at 3.8 percent.
Stubborn Inflation Impacts Economy
The UK’s economy continues to grapple with stubbornly high inflation, which has contributed to the rise in the unemployment rate. Although finance minister Jeremy Hunt acknowledged the strength of the jobs market compared to historical standards, he stressed the need to address inflationary pressures that discourage investment and erode consumer confidence.
Record-Level Pay Growth Amid Falling Real Earnings
The ONS revealed that pay excluding bonuses has risen at record levels. However, due to high inflation, the real value of weekly earnings continues to decline, albeit at a slower pace compared to the end of 2021. Darren Morgan, Director of Economic Statistics at the ONS, highlighted the impact of inflation on the purchasing power of individuals despite significant pay growth.
