Thu, 17 Jul 2025

Thu, 17 Jul 2025 UK jobs market weakens as unemployment rate rises

The official data shows wage growth has slowed while the number of vacancies continues to fall.

* UK annual pay growth rate slows to 5% between March and May
* Unemployment rate rises to 4.7%, its highest in four years
* Number of job vacancies has been falling continuously for three years, reaching a new low of 727,000
* ONS warns that unemployment data needs to be treated with caution due to problems with data collection
* Many businesses are experiencing difficulties recruiting staff due to increased employer National Insurance contributions (NICs)
* Recruitment freeze is reported in many sectors, including hospitality and retail
* Businesses are looking at restructuring, salary reviews, four-day weeks, cutting overtime, and replacing permanent roles with agency workers
* Number of people on PAYE payroll has fallen by 68,000 since March to May period, with further decline forecast for June
* Bank of England is widely expected to cut interest rates from 4.25% to 4% at its next meeting in August
* Interest rate cut becomes more likely due to weakening jobs market and slowing pay growth
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