UK unemployment climbs as inflation weighs on economy
Despite the rise, finance minister Jeremy Hunt said Britain's "jobs market is strong with unemployment low by historical standards".
Published: 11th July 2023 06:23 PM | Last Updated: 11th July 2023 06:23 PM | A+A A-
Britain's new Chancellor of the Exchequer Jeremy Hunt leaves 10 Downing Street in central London. (Photo | AFP)
LONDON: UK unemployment rose back to four percent in the three months to the end of May, official data showed Tuesday, as the economy struggles with stubbornly-high inflation.
The unemployment rate increased from 3.8 percent in the three months to the end of April, the Office for National Statistics (ONS) said in a statement.
The rate was back at four percent for the first time since the start of 2022. Analysts' consensus had been for unemployment to remain at 3.8 percent.
Despite the rise, finance minister Jeremy Hunt said Britain's "jobs market is strong with unemployment low by historical standards".
The ONS added that pay excluding bonuses had risen at record levels.
"Due to high inflation, however, the real value of weekly earnings are still falling, although now at its slowest rate since the end of 2021," noted Darren Morgan, director of economic statistics at the ONS.
In a keynote speech late Monday, Hunt insisted there could "be no sustainable growth without eliminating the inflation that deters investment and erodes consumer confidence".
UK annual inflation has eased in recent months but remains close to nine percent.
This is far above the Bank of England's two-percent target, triggering numerous interest-rate hikes from the central bank.
"UK inflation is already running far hotter than policymakers had hoped, and price pressures will struggle to abate any time soon so long as earnings continue to grow at the current scorching pace," said Matthew Ryan, head of market strategy at Ebury.
The ONS revealed that average regular pay, not including bonuses, was 7.3-percent higher in the three months to May compared with the same period one year earlier.
While BoE governor Andrew Bailey and Hunt call for pay restraint, thousands of public and private-sector workers continue to strike in a push for wages rises that keep up with inflation.
