- Unemployment rate rises to 4.7% and average earnings growth slows to 5%
Britain’s jobless rate has struck its highest level for four years as workers also faced another slowdown in wage growth, official figures revealed today.
The Office for National Statistics (ONS) said the rate of UK unemployment increased to 4.7 per cent in the three months to May, from 4.6 per cent in three months to April.
It said this marked the highest level since June 2021 – with the data coming at a rocky time for embattled Chancellor Rachel Reeves following her tax raid on businesses.
Meanwhile the ONS also said average earnings growth, excluding bonuses, slowed to 5 per cent in the period to May – to its lowest level for almost three years.
Further data showed 727,000 job vacancies in April to June, down 56,000 on the quarter. There have now been quarterly declines every month for the last three years.
And the revised estimate of employees on the payroll in May was down 25,000 on the month. The provisional estimate for last month was down another 41,000.
The figures point towards further pressure in the UK labour market, days after the governor of the Bank of England warned that the Bank is prepared to make larger interest rate cuts if it sees that the job market slowing.
Chancellor Rachel Reeves delivers her Mansion House speech in London on Tuesday
ONS director of economic statistics Liz McKeown said: ‘The labour market continues to weaken, with the number of employees on payroll falling again, though revised tax data shows the decline in recent months is less pronounced than previously estimated.
‘Pay growth fell again in both cash and real terms, but both measures remain relatively strong by historic standards.’
It comes as Ms Reeves will pitch the UK as a ‘beacon of stability’ when she meets fellow finance ministers in South Africa.
The Chancellor is set to meet her counterparts at the G20 in Durban today and tomorrow as the Government continues to push for economic growth.
After growing 0.7 per cent in the first three months of 2025, the UK economy has since shrunk in the face of global and domestic challenges while inflation hit an 18-month high in June.
Meanwhile, global uncertainty persists with the threat of US tariffs and the ongoing impact of the war in Ukraine.
The ONS said the rate of UK unemployment rose to 4.7 per cent in the three months to May
UK average earnings growth, excluding bonuses, slowed to 5 per cent in the period to May
Government minister Jess Phillips said today that it would take a ‘long time’ to turn around the economy.
The Home Office minister told Sky News: ‘Fourteen years of totally stagnant growth is not something that changes overnight and that is why we have to have a steely focus on getting investment into Britain.’
She said the unemployment figures were ‘worrying’ but the Government was ‘fiercely seeking to create economic growth’.
‘Some of this stuff is going to take huge amounts of time when we’ve had decades of stagnant growth, but as a constituency MP, as a citizen of the UK, these things are always worrying,’ she said.
But, she added: ‘There have been hundreds of thousands of new jobs created and wages have increased in the last 10 months quicker than they increased in the last 10 years.’
