Unemployment nears four-year high in wake of Reeves tax raid
UK unemployment has hit its highest level in almost four years as businesses shed jobs and freeze hiring in the wake of Rachel Reeves's tax raid.
Official figures showed the unemployment rate rose to 4.6pc in the three months to April, up from 4.4pc in the previous three months. This is the highest since the summer of 2021 when Britain was only just emerging from lockdowns.
The Chancellor's tax rises came into effect in April, but employers had warned that the Chancellor's £25bn National Insurance tax raid and another inflation-busting minimum wage jump were forcing them to freeze hiring in the months beforehand.
Meanwhile, employers put the brakes on hiring with the number of vacancies falling from to 736,000 in the three months to May, compared with 760,000 in the previous quarter, the Office for National Statistics (ONS) said.
Wage growth also slowed, to rise by 5.2pc in the three months to April on a year earlier, the slowest pace in seven months.
Andrew Griffith, shadow business secretary, said: 'It is disappointing but no surprise that unemployment is up again.
'Businesses are still absorbing a £25bn jobs tax but things are about to get even worse as Labour's £5bn unemployment bill hits businesses with higher regulation.'
Despite the surge in unemployment, jobs in the public sector jumped to the highest level in 14 years as the Chancellor prepares to unveil a £300bn spending spree this week.
Almost 6.2m people were employed in the public sector in March, official figures show, 35,000 more than a year earlier. This is the highest number of public sector employees since December 2011.
It comes ahead of Ms Reeves's spending review on Wednesday, which is expected to offer big increases to defence and health while squeezing other departments.
The Chancellor has raised departmental spending by nearly £400bn since Labour won the election. It comes as economists have warned more tax rises are 'inevitable' in autumn.
The figures from the ONS also show that the number of civil servants is the highest since 2006, at 550,000, rising by 6,000 from a year earlier.
This helped to push the total figure of central government workers to a record high of 4m, up by 93,000 from a year ago.
The ONS said the rise was driven by the NHS, the Civil Service and some local authority schools becoming academies, which changes how their staff are classified in the numbers.
Private sector workers experienced slower pay growth than those in the public sector when excluding bonuses, at 5.1pc to 5.6pc in February to April compared with the same period last year.
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