Jobless rate unexpectedly rises to 5% and employment falls by 100,000, biggest drop in six years; economists say June interest rate hike looks less likely
“With unemployment at 5%, the expectation is that it will rise this year as business uncertainty grows amid the UK’s political unrest and the Iran War,” said Patrick Milnes, head of policy for people and work at the British Chambers of Commerce. The BCC expects it to increase to 5.5%.
A further drop in vacancies, now at their lowest outside the pandemic for more than a decade, suggests businesses are pausing recruitment. This is unsurprising as labour costs remain a key concern.
But with the conflict in Iran likely to drive higher inflation later in the year, as unemployment also rises and growth remains weak, the possibility of stagflation is very real.
These figures signal a growing distress within the UK’s labour market as soaring labour costs and the fallout from the Iran war drive more businesses to reduce recruitment and limit pay awards.
The continued fall in job vacancies is a worrying sign of the strength of the labour market as it suggests that demand for staff is deteriorating quickly amid global headwinds and the growing financial squeeze on firms.
Continue reading…Jobless rate unexpectedly rises to 5% and employment falls by 100,000, biggest drop in six years; economists say June interest rate hike looks less likely“With unemployment at 5%, the expectation is that it will rise this year as business uncertainty grows amid the UK’s political unrest and the Iran War,” said Patrick Milnes, head of policy for people and work at the British Chambers of Commerce. The BCC expects it to increase to 5.5%.A further drop in vacancies, now at their lowest outside the pandemic for more than a decade, suggests businesses are pausing recruitment. This is unsurprising as labour costs remain a key concern.But with the conflict in Iran likely to drive higher inflation later in the year, as unemployment also rises and growth remains weak, the possibility of stagflation is very real.These figures signal a growing distress within the UK’s labour market as soaring labour costs and the fallout from the Iran war drive more businesses to reduce recruitment and limit pay awards.The continued fall in job vacancies is a worrying sign of the strength of the labour market as it suggests that demand for staff is deteriorating quickly amid global headwinds and the growing financial squeeze on firms. Continue reading…
