Overview
- ONS data released on Tuesday show the jobless rate climbed to 5.0% for the three months to March while vacancies dropped to about 705,000, the weakest reading since 2021.
- The ONS’s early estimate points to a 100,000 fall in payrolled employees in April, the largest monthly drop since May 2020, though the agency warned this preliminary monthly figure may be revised.
- Lower‑paid sectors drove much of the weakness: retail and hospitality recorded big falls in vacancies and payrolls and younger workers bore the brunt, with youth unemployment reported between about 14.7% and 16.2% across outlets.
- Regular pay growth slowed to roughly 3.4% in the first quarter, only about 0.3 percentage points above CPI inflation, leaving real wages under pressure and limiting the scope for large pay rises.
- Analysts and officials link part of the turn to higher energy prices from the Iran‑related disruption, weaker business confidence and higher costs for firms, and they say the data complicate the Bank of England’s rate path and raise calls for targeted government support and youth employment reforms.