UK's unemployment rate stayed at a four-year high in the three months to June, official data showed on Tuesday, with job vacancies falling during a period that included a UK tax increase and new US tariffs.
The Office for National Statistics (ONS) said the rate was 4.7 per cent, unchanged from March-May, when it reached the highest level since June 2021.
The slowdown in the labour market comes after a business tax rise, announced in the Labour government’s first budget, took effect in April. Analysts had warned the change would likely lead companies to reduce hiring.
April also marked the start of a baseline 10 per cent tariff on the UK and other countries introduced by US President Donald Trump.
"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," she said.
The data showed a small drop in company headcount while wage growth, excluding bonuses, remained steady amid persistent price pressures.
Job vacancies fell by 44,000 in the three months to July to 718,000 — the lowest since April 2021. The ONS said there were signs some firms were not recruiting or replacing departing staff.
"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," said Joe Nellis, economic adviser at MHA.
"These factors have dampened business confidence and thus recruitment," he said.
Last week, the Bank of England cut its key interest rate by a quarter point to 4 per cent in an effort to support the economy, which is under pressure from US tariffs.
"It's touch and go as to whether there will be a (rate) cut in November but December is looking a bit more likely," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
(With inputs from agencies)
