Key facts
- UK job vacancies fell by 19,000 between March and May.
- The unemployment rate dropped to 4.9%.
- Wage growth, excluding bonuses, was 3.4%, and including bonuses, was 4.4%.
- New recruit numbers are at their lowest level in five years.
- Services inflation increased to 3.7%.
Job vacancies across the UK have fallen again, with official data from the Office for National Statistics (ONS) revealing a drop of 19,000 between March and May. This trend poses a risk of rising unemployment for Britons.
The ONS also reported that the unemployment rate decreased to 4.9%, down from 5% in the previous month, a figure lower than market expectations. However, the data reflects broader challenges in the UK economy, including high labor costs driven by intense wage pressures and a significant tax burden on businesses.
Wage growth, excluding bonuses, stood at 3.4%, exceeding expectations, while including bonuses, it reached 4.4%. Liz McKeown, director of economic statistics at the ONS, noted that payroll numbers continued to fall during this period, with new recruits at their lowest level in five years. She added that overall employment remained largely unchanged, with some individuals moving into self-employment.
These labor market figures come as the Bank of England's Monetary Policy Committee navigates a complex environment. While the labor market shows signs of weakening, inflation expectations remain elevated. Services inflation, a key metric for the central bank, jumped from 3.2% to 3.7%.
Andrew Griffith, the shadow business secretary, has cautioned that rising business costs, potentially as high as nine percent, could lead to either higher consumer prices or business closures and job losses.
Economists suggest the Bank of England may maintain its current monetary policy for the remainder of the year before considering interest rate cuts in 2027, anticipating that weakened demand might curb price spirals.