Bank of England Cuts Rates as Jobs Market Slows
The U.K.'s central bank lowered its key rate to 4% from 4.25%, having made the first cut in this series in August 2024, when borrowing costs stood at 5.25%. Policymakers repeated their pledge to continue to remove the restraints they have placed on economic activity at a 'careful and gradual' pace.
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Yahoo
7 minutes ago
- Yahoo
Why are universal credit claims at a record high?
As the government reports a record rise in universal credit claimants, we look at the reality behind the figures. Warnings of a record number of universal credit claimants have been widely reported this week. The government's own data indicates that one million more people are claiming universal credit compared to this time last year — adding to its claims that the UK's benefits bill is "unsustainable". In reality, what is behind the increase is significantly more interesting and complex. Let's unpack how the government arrived at this figure — and what the experts say. People are being moved from legacy benefits onto universal credit When universal credit was introduced back in 2013, the government's aim was to simplify the benefits system and transfer every benefit claimant to universal credit. In reality, the process has been a lot more complicated than the government had hoped. The Department for Work and Pensions (DWP) is still transferring some households from older benefits — dubbed legacy benefits — into the universal credit system. According to the government's own figures, between February 2024 and February 2025, a total of approximately 1,747,985 individuals in 1,259,480 households claiming legacy benefits were sent migration notices, notifying them that they would be transferred to universal credit. Of those, around 1.4 million people have moved onto universal credit 'The latest rise in the number of people receiving universal credit is due in part to people being moved across from legacy benefits," Beatrice Orchard, Senior Policy and Public Affairs Manager at the UK's largest foodbank charity, Trussell, told Yahoo News. "When universal credit was set up it was designed to streamline support into one means-tested payment and people are moving from other benefits onto the newer system." Jack Kellam, the head of communications at the Autonomy Institute, echoes this. "From July 2022 around 1.6 million people have claimed UC following a migration notice," he told Yahoo News. "While this clearly doesn't explain all of the current rise, it's a significant amount of people, and we need to keep this in mind when we see figures about growth in universal credit claimants." The TUC's general secretary, Paul Nowak, also believes this is a key factor behind the rise. He told Yahoo News: "The rise in claimants is likely to driven by more people now getting universal credit who would previously have received legacy benefits like job seekers allowance and incapacity benefit." The pension age has risen When the state pension age increases, those who would be claiming their pension earlier are entitled to other state support for longer. Additionally, people who previously would have started receiving the state pension and pension credit must now wait longer before they become eligible for those forms of support As the state pension age in the UK last increased from 65 to 66 for both men and women by October 2020, that knock-on effect will be felt in the system now. The next planned increase — raising the state pension age from 66 to 67 — is scheduled between 2026 and 2028, which is also likely to result in an uptick of claims. "Rising pension age also means that more people are eligible for working-age support for longer," Orchard explained. The cost of living is rising It is clear that so many of us are feeling the pinch due to the rising cost of living — and no-one is feeling that more than lower-income families. If we compare the cost of living to the same period where a record rise in universal credit claims has been measured, the cost of living in the UK has risen by approximately 3.6% in the 12 months from July 2024 to July 2025, according to the Consumer Prices Index (CPI). This marks a continued increase in prices, driven mainly by higher costs in food, fuel, and other essential goods and services. The inflation rate remains above the Bank of England's 2% target. Food inflation reached 4.5% in June 2025, and energy and housing costs have also contributed significantly to the rise. It is worth noting that the average wage in the UK increased by approximately 4.6% year-on-year in the three months to June 2025. However, when adjusted for inflation, real earnings increased by only about 0.5%, making the weakest real wage growth since June 2023 — another challenging financial year in recent memory. Social security as a share of GDP is steady If we were to look at this figure in isolation, the experts are keen to point out that social security spending as a share of the UK's GDP is steady. According to the latest available figures displayed in this chart, the largest social security spend is on pensioners, indicating the government's spend on winter fuel payment, state pension and pension credit is more significant. Spending specifically on benefits for working-age adults (excluding health and housing-related support) declined from 2.8% of GDP in 2007-08 to about 1.9% in 2024-25, according to the Resolution Foundation. While total social security spending has moderately increased as a share of GDP, the composition has shifted notably, with reduced spending on general working-age benefits but increased spending on disability-related benefits. 'Spending on working-age social security as a share of GDP has been stable for the past decade, and is forecast to remain so in the years ahead," Orchard added. People in the UK are getting sicker A rise in disability benefits also gets at another factor: people in the UK are getting sicker. "Poverty is one of the leading causes of ill health," Kellam said. "Many have been trapped just above or below the poverty line for many years – bouncing in and out of work, just about keeping their heads above water. "We should not be surprised that an economy beset by low pay and chronic insecurity – alongside the existing issues the UK has in health and social care – has begun to generate a situation in which more and more individuals are too unwell to work, or need to care for others who are too unwell to work." Kellam explained this issue in detail, arguing that the government has not been proactive enough in tackling some of the biggest causes of ill health in the UK, pre and post the Covid-19 pandemic. "Rather than invest in social housing, successive governments have instead opted to use welfare to subsidise rising private rents," he told Yahoo News. "Rather than develop a robust social care system for an increasingly ageing population, governments have chosen to ground the system subsidising unpaid carers, who are then pushed out of employment and into universal credit. "Rather than tackle the explosion of novel forms of exploitative employment relations in recent decades – from bogus self-employment, to zero-hours contracts and algorithmic management – governments have instead topped up the low wages offered by employers. "At root, we have an economy in which, for many, employers do not pay enough, with anywhere near enough security, with very high housing and living costs," he added. Many people claiming universal credit are in work One other less explored factor accounting is the modest but steady increase in people claiming universal credit are in work. In July 2025, there were 2.2 million working people on universal credit, up from 2.1 million a year before. In reality, Trussell thinks that figure could be closer to 2.7 million. 'Work is not providing the reliable route out of hardship we might expect with 2.7 million people in work needing to top up their income with universal credit," Orchard told Yahoo News. "For many people, disabilities, health conditions and care responsibilities are major barriers to work." *Yahoo News has reached out to the DWP for comment.
Bloomberg
10 minutes ago
- Bloomberg
UnitedHealth Surges After Buffett, Tepper Bet on Turnaround
UnitedHealth Group Inc. shares jumped after funds piled into the company, which has been hampered by a federal probe into its business practices and weakening results. The investments were a welcome reprieve for a company that had seen its stock fall 46% this year. In premarket trading on Friday, the shares rose 10%, which would be the biggest increase since 2020.
Forbes
10 minutes ago
- Forbes
The AI Reality Check: Keeping Your Job As Automation Ramps Up
Erik Jost, VP Modern Workplace, Black Box Corporation. We've all seen the headlines. AI is supposedly set to replace 20%, 50%, maybe even 80% of today's jobs. The predictions keep coming, and they all point in the same direction. Automation is happening now, which has led many to ask, 'Will my job be replaced?' But the question I've been asking is, 'What kind of jobs are going to stay?' Connection As A Competitive Edge I keep having that 'who will stay' conversation at home. My wife is a global luxury real estate advisor, and her work is built on relationships and trust. She always says: 'Luxury isn't what you pay. It's the service you get.' She's right. The difference between a high-end experience and a commodity transaction isn't the commission; it's the connection. And that's going to define not just premium services, but the entire workforce moving forward. Take ride-sharing as a key example. Autonomous cars from Waymo and Tesla are working toward ensuring safer and cheaper alternatives to human drivers. But some people want more than transportation. They appreciate the human interaction, whether that takes the form of a bottle of water, a well-timed joke or the sense that someone actually cares about their experience. Even in an industry like real estate, while AI is changing the game, what makes workers irreplaceable is the way they work with people. This means doing more than just selling homes to help people build wealth and find places to live meaningful lives. It's having the foresight to keep clients' kids busy with coloring books and snacks when they bring their children to showings. That kind of connection can't be scripted or scaled. While AI undoubtedly will displace jobs, it can't replace the human element that makes people uniquely valuable. For Leaders: Automate, Then Invest In People Automation is viewed as the baseline for staying competitive today. While many organizations are working to automate everything they can, efficiency is just the starting point. The next step is rethinking what your team needs to look like in this new landscape. Here's where it gets interesting, as I believe the roles that remain won't be traditional. They won't fit into clean org charts. They'll be filled by people you already think of as your 'superstars,' the ones who stretch beyond their job description and deliver in front of customers and executives. They're the ones who are empathetic, socially aware and adaptable. These people aren't valuable because of a title or a certification. They're valuable because they bring a mix of curiosity, execution and emotional intelligence that no AI can match. They adapt quickly. They see change coming before it hits. They know how to talk to people. If you're leading a company, your work is to identify those people. Invest in them. Build your next chapter around them. These top performers will help to make your business future-proof. For Everyone Else: Lean Into Your Human-ness Thanks to AI, a small company can now do what used to take a large one. For that matter, a one-person startup with a smart AI stack can scale like never before. If you're just trying to stay relevant in an economy that feels like it's moving at light speed, what do you do? First, it's important not to pretend like AI and today's innovations can be beaten at their own games. They can't be out-memorized, out-produced or out-coded. However, you can work toward ensuring you're irreplaceable in the ways that matter most. That means developing the traits AI can't touch. Today, I see three traits that will define the people who survive and thrive in this new environment. First, they'll be deeply curious and actively engaged in learning and understanding how the world is changing. Second, they'll be capable of translating that curiosity into action, turning ideas into reality and consistently delivering results. Finally, they'll lean into their human strengths: the ability to communicate with empathy, navigate tough conversations and go above and beyond when the moment calls for it. These skills are what can separate those who have built high-value human connection from purely transactional workers. Across industries, that combination of curiosity, execution and human connection is already defining the next generation of successful professionals. Where Is This All Going? Nobody knows for sure what the future workforce might like. Today, it's BMW's factory robots placing screws with millimeter-level precision. Tomorrow, a household robot might be mowing your lawn, folding your laundry and troubleshooting your home's electrical systems. And the day after that? Maybe doing your taxes, running your business or driving your kids to school. Some days it feels like we're headed for a utopia where machines give us back our time to enjoy Michelin-quality dinners, clean homes and neatly tended gardens, and space to focus on meaningful work and relationships. Other days, it feels like we're racing toward a dystopia where half the world is unemployed and the other half is trying to keep up. There's no guaranteed path forward, but what I do know is that if you want to stay in the game, you need to bring what the robots can't. Show up. Stretch yourself. Connect. Learn. These very human skills will keep you relevant when the machines are doing everything else. Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?
