UK Unemployment Reaches Highest Level In 4 Years

The United Kingdom’s unemployment rate has reached the highest level since August 2021, according to official data, on Tuesday.

Wage growth has slowed while unemployment is rising in the United Kingdom, according to the latest figures from the Office for National Statistics (ONS).

The ONS reported signs of a “cooling” labour market, with average regular earnings growth easing to 5.6% in the three months to March, the lowest rate since November 2024.

Despite the slowdown, wages are still outpacing inflation, recording a 2.6% increase after accounting for the Consumer Prices Index.

The unemployment rate increased to 4.5% in the quarter to March, the highest since the summer of 2021, rising from 4.4% in the previous quarter. This increase comes amid concerns about the impact of rising employee costs on businesses.

Job vacancies declined for the second consecutive quarter, remaining below pre-pandemic levels. Meanwhile, the number of workers on UK payrolls dropped by 33,000 in April, reducing the total to 30.3 million.

ONS director of economic statistics Liz McKeown said, “Wage growth slowed slightly in the latest period but remains relatively strong, with little difference now between public and private sector pay.

“The broader picture continues to show a cooling labour market, with payroll employment falling in the first quarter and job vacancies declining at an accelerated pace in recent months.”

Employment Minister Alison McGovern stated, “Real wages are growing, with around 200,000 more people in work since the launch of our Get Britain Working plan.

“However, the Government’s Plan for Change needs more workers in every part of the country. We will continue to reform Jobcentres, invest in British industry, and support those in need until everyone who can work has access to a good job and income.”

Partner and Head of Platform and Benefits at Barnett Waddingham, Julia Turney, said, “With employer National Insurance hikes now in effect and the Employment Rights Bill expected to advance over the summer, the months ahead will be a significant test of how businesses handle the mounting pressures of cost and compliance.”