Britain’s unemployment rate held steady at 4.7 per cent in the three months to the end of June, the highest level since June 2021, according to data released Tuesday by the Office for National Statistics (ONS).
The rate was unchanged from the March–May period, with the ONS noting that job vacancies fell sharply during a quarter marked by a UK business tax increase and the introduction of US tariffs.
The cooling labour market follows the Labour government’s April implementation of a business tax hike announced in its inaugural budget, which analysts warned would prompt firms to slow hiring. That same month, US President Donald Trump’s administration imposed a baseline 10-per-cent tariff on the UK and other countries.
“These latest figures point to a continued cooling of the labour market,” said Liz McKeown, ONS Director of Economic Statistics. “The number of employees on payroll has now fallen in ten of the last twelve months, with these falls concentrated in hospitality and retail.”
Vacancies dropped by 44,000 in the three months to July, reaching 718,000 — the lowest since April 2021. The ONS noted that some businesses appear unwilling to recruit or replace departing staff.
Joe Nellis, economic adviser at MHA, said: “The impact of changes to employer costs in the 2024 Autumn Budget continues to be felt, as well as the ongoing uncertainty in global markets as a result of tariffs. These factors have dampened business confidence and thus recruitment.”
Wage growth, excluding bonuses, remained steady as inflationary pressures persisted.
The Bank of England last week cut its key interest rate by a quarter point to four per cent to stimulate an economy facing headwinds from tariffs and slowing employment growth. “It’s touch and go as to whether there will be a cut in November, but December is looking a bit more likely,” said Susannah Streeter, Head of Money and Markets at Hargreaves Lansdown.
