UK jobless rate edges up as people return to labour market

BRITAIN’S jobless rate rose for the first time since late 2020, but there were signs of more people returning to the job market, where employers’ struggle to fill vacancies has added to the Bank of England’s inflation headache.

Official data showed the jobless rate edged up to 3.8 per cent in the 3 months to April from 3.7 per cent in the previous labour market report for the 3 months to March, the first such increase since the 3 months to May last year.

Economists polled by Reuters had expected the unemployment rate to fall to 3.6 per cent.

But the economic inactivity rate - measuring people who have dropped out of the labour market altogether and therefore do not show up as unemployed - fell by 0.1 percentage point to 21.3 per cent for the February to April period, driven mostly by students.

The BOE is expected to raise interest rates again on Thursday as it tries to stop the recent jump in inflation from turning into a longer-term problem if employers resort to increasing their pay sharply to fill vacancies.

Tuesday’s data showed growth in regular pay picked up slightly to 4.2 per cent in the 3 months to April, despite expectations that it would slow. But growth in total pay, including bonuses, slowed to 6.8 per cent from 7 per cent.

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A further 177,000 people were employed in the 3 months to April compared with the previous 3-month period, more than the median forecast for a 105,000 increase in the Reuters poll, and the number of unemployed fell by 47,000. REUTERS