Fears are mounting for the UK jobs market today as figures showed a slowdown after Rachel Reeves‘ tax raid hit.
Numbers on payrolls were down 33,000 in April according to early estimates, having dropped 106,000 in the past year to 30.3million.
Vacancies also tumbled 42,000 over the quarter, to 761,000 in the three months from February to April. The Office for National Statistics (ONS) warned that the rate of decline appeared to be increasing.
Unemployment was nudging up even before the National Insurance hike and increases in the minimum wage took effect last month. The rate rose to 4.5 per cent in the three months to March, from 4.4 per cent in the three months to February.
ONS director of economic statistics Liz McKeown 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.’
Numbers on payrolls were down 33,000 in April according to early estimates, having dropped 106,000 in the past year to 30.3million
Vacancies also tumbled 42,000 over the quarter, to 761,000 in the three months from February to April
Unemployment was nudging up even before the National Insurance hike and increases in the minimum wage took effect last month (Rachel Reeves pictured in Downing Street yesterday)
Suren Thiru, economics director at the ICAEW, said: ‘April’s drop in payrolled employment and unemployment rate increase suggests that cracks in the labour market are widening as the double whammy of rising National Insurance and National Living Wage hit employers, exacerbated by elevated global uncertainty.
‘While wage growth remains uncomfortably high, the downward pressure from a struggling economy, softening jobs market and rising employment costs should help put pay settlements on a firmer downward path.’
He added: ‘This growing softness in the labour market is unlikely to be sufficient to persuade rate setters to depart from their current approach to gradually cutting interest rates, given lingering concerns over inflation and heightened global uncertainty.’
Shadow work and pensions secretary Helen Whately said: ‘This is just the latest in a string of bleak economic figures for the Government – and they do not come as a surprise. Back in October, the OBR warned that Labour’s Jobs Tax would cost 50,000 jobs, yet they pushed ahead with it anyway.
‘It is clear that Labour’s Jobs Tax and business rates hike are putting an intolerable burden on employers, and with Employment Rights Bill set to choke businesses in red tape, things are only going to get worse.’
The ONS data show the areas where payroll numbers have been declining most
