UK unemployment rate hits five-year high of 5.2% as wage growth slows – business live | Business

Here’s some snap reaction to the rise in UK unemployment:

Jonathan Raymond, investment manager at Quilter Cheviot, says there are signs that the UK labour market is ‘creaking’:

“Following a November where hiring plans were put on hold due to the budget, things are yet to get going again, potentially highlighting the longer-term impacts of increases costs that businesses have faced.

Increased minimum wage costs, national insurance contributions, business rates and concerns around the impact of the Employment Rights Act continues to show up in the data and appears to be putting a weight on the economy. Economic indicators were beginning to shine some positivity but that has arguably been wiped by this latest data.

Patrick Milnes, Head of People and Work Policy at the British Chambers of Commerce, blames those rising employment costs:

“There are strong signs that the labour market is continuing to loosen as wage growth including bonuses has eased to 4.2% and the rate of unemployment has risen to 5.2%.

“Wage growth is being propped up by the public sector and the number of unemployed people per vacancy now sits at 2.6, the highest in more than 10 years if the pandemic period is excluded.

“Last year, businesses were hit hard by the increase in National Insurance contributions, and many are now facing further rises in the National Living Wage alongside higher business rates. Our research shows that labour costs remain the biggest cost pressure for businesses, cited by 72% of businesses.

“Against this background it is unsurprising they are holding off hiring. Especially as the imminent introduction of new Employment Rights legislation adds additional complexity to the picture.

“While the Spring Statement will provide a fuller update on the economic outlook, businesses are clear they want to see concrete action to reduce costs, boost exports and encourage investment.”

Ben Harrison, Director of the Work Foundation at Lancaster University, says today’s figures show a weakening and uneven labour market, with more people looking for work and with young people particularly hit:

“While overall employment appears broadly stable and the rise in redundancies has slowed, the pain is not evenly spread. Young people, disabled people and men are bearing the brunt of the rise.

“Youth unemployment is now at 14.0%, the highest rate for five years. This is particularly concerning as the number of 18-24 year olds out of work has jumped by 80,000 on the quarter to 575,000. More young people are actively seeking work, but too many are struggling to secure it.

“Vacancies remain subdued at 726,000, despite a slight uptick on the quarter. The Government clearly recognises the need to provide more support to help people back into work but many initiatives – such as jobs on wheels and youth guarantees – remain in pilot phases.

“To Get Britain Working, Ministers must prioritise a twin focus on rapidly expanding tailored employment support and ensuring those returning to work are able to access secure, and well-paid jobs across the country.”