Unemployment across UK jumps as pay growth reaches record level, ONS figures show

Unemployment in the UK has climbed higher than expected in the first three months of 2023, while wages increased at the joint-highest rate on record.

The Office for National Statistics (ONS) said the UK unemployment rate jumped to 4% for the three months to May, from 3.8% in the previous three-month period.

Economists had predicted a reading of 3.8% for the latest quarter.

Average regular wages during this period were 7.3% higher, the same as during the previous three months and the joint highest since records began in 2001.

ONS director of economic statistics Darren Morgan said: “Total employment grew in the latest three months while the number of people actively looking for work also increased, both driven by men rejoining the labour market.

“Pay excluding bonuses has again risen at record levels in cash terms.

“Due to high inflation, however, the real value of weekly earnings are still falling, although now at its slowest rate since the end of 2021.”

Chancellor of the Exchequer Jeremy Hunt said: “Our jobs market is strong with unemployment low by historical standards. But we still have around 1 million job vacancies, pushing up inflation even further.

“Our labour market reforms – including expanding free childcare next year – will help to build the high wage, high growth, low inflation economy we all want to see.”

Minister for employment, Guy Opperman said: “It’s encouraging to see inactivity falling, vacancies dropping, and employment on the up. To get prices down and help make mortgages manageable, we must halve inflation and grow our economy.

“To do that we are helping those who can, into work, and we recently increased the amount someone on Universal Credit can claim back for childcare to make working that bit easier.

“Our new Midlife MOT website is also helping everyone to future-proof their finances, whether that’s looking at options for work, reviewing their skills or understanding their pensions.”