Wage growth has eased back while Britain’s unemployment rate has hit a near four-year high as the UK jobs market falters amid worries over the impact of soaring employee costs for companies.
The Office for National Statistics (ONS) said the latest official figures showed further signs of a “cooling” labour market, with average regular earnings growth falling to 5.6% in the three months to March – the lowest level since the three months to November 2024.
But wages still outstripped inflation, rising by 2.6% higher after taking Consumer Prices Index inflation into account.
The ONS said the rate of unemployment rose to 4.5% in the quarter to March, up from 4.4% in the three months to February and the highest since June to August 2021.
The figures also showed vacancies falling and remaining below pre-pandemic levels for the second quarter in a row, while estimates showed the number of workers on UK payrolls dropped by 33,000 in April to 30.3 million.
Liz McKeown, ONS director of economic statistics, said: “Wage growth slowed slightly in the latest period but remains relatively strong, with public and private sectors now showing little difference.
“The broader picture continues to be of the labour market cooling, with the number of employees on payroll falling in the first quarter of the year.
“The number of job vacancies has also fallen again, with the rate of decline increasing in the last few months.”
