UK unemployment holds at four-year high amid tax, tariffs
LONDON : Britain's unemployment rate remained at a four-year high, official data showed Tuesday, as job vacancies shrank during a period that included a UK tax hike and US tariffs kicking in.
The rate stood at 4.7% in the three months to the end of June, the office for national statistics said in a statement.
It was unchanged from the March-May period, when it reached the highest level since June 2021, the ONS added.
The cooling labour market comes as a business tax hike – laid out in the Labour government's inaugural budget – took effect in April, with analysts warning it would lead companies to scale back hiring.
April also saw the beginning of a baseline 10% tariff on the UK and other countries by US President Donald Trump.
'These latest figures point to a continued cooling of the labour market,' said ONS director of economic statistics Liz McKeown.
'The number of employees on payroll has now fallen in ten of the last twelve months, with these falls concentrated in hospitality and retail,' she added.
There was a modest fall in company headcount while wage growth, excluding bonuses, held steady as price pressures persisted.
Data also showed job vacancies tumbled by 44,000 in the three months to the end of July to 718,000 – its lowest level since April 2021.
The ONS said there was evidence some firms may not be recruiting new workers or replacing those who have left.
'The impact of changes to employer costs in the 2024 Autumn Budget continues to be felt, as well as the ongoing uncertainty in global markets as a result of tariffs,' said Joe Nellis, economic adviser at accountancy and advisory firm MHA.
'These factors have dampened business confidence and thus recruitment,' he added.
The Bank of England cut its key interest rate last week by a quarter point to 4% as it bids to boost a struggling UK economy threatened by US tariffs.
'It's touch and go as to whether there will be a (rate) cut in November but December is looking a bit more likely,' said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
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