UK unemployment unexpectedly rose during the three months to April but take-home pay continued to shrink as inflation eroded real wages.
The increase in the unemployment rate was the first in more than a year, suggesting that the weakening economy is starting to feed through into a softer labour market. The official figures from the Office for National Statistics (ONS) show the jobless rate edged up to 3.8 per cent in the three months to April from 3.7% during the three months to March.
The rise partly reflected a drop in the economic inactivity rate for working-age adults, which measures people who have dropped out of the labour market and are therefore not deemed to be unemployed. It fell by 0.1 percentage points to 21.3% for the February to April period, driven mostly by students seeking work.
Although growth in vacancies slowed, they hit a new record high and the fall in the inactivity rate still left it well above pre-pandemic levels, meaning the jobs market remains extremely tight.
"Admittedly, much softer economic growth in the second half of the year, due to the cost-of-living crisis, will dampen demand for labour and ease some of the tightness in the labour market," said Thomas Pugh, economist at RSM UK.
"However, we think the smaller pool of available workers will keep the labour market tight for at least the next couple of years."
Growth in regular pay picked up slightly to 4.2%, but growth in total pay, including bonuses, slowed to 6.8% from 7.0%.
Despite relatively high levels of pay growth, incomes are being eroded by the recent leap in inflation caused by the reopening of the global economy after the coronavirus pandemic and Russia's invasion of Ukraine.
Using the UK's consumer prices index, real-terms total pay was 0.5% lower than a year before, the biggest drop since August 2020 when many workers were on reduced furlough pay. Stripping out bonuses, pay fell 3.0%, the largest such inflation-adjusted drop since November 2011.
Earth Blox gears up to take on the world
Earth Blox has completed its first round of external funding as it seeks to break into new markets for its earth observation technology.
The Edinburgh firm has raised £1.5 million from investment syndicate Archangels to underwrite further development of its software which uses data from the Google Earth engine to allow anyone to analyse images gathered by satellite. This normally requires technical coding skills, but with Earth Blox is simplified to a “drag and drop” process.
Social Investment Scotland revives fund to boost charities amid tough times
A fund established to help social enterprises and charities recover from the impact of the pandemic has reopened with a fresh cash injection.
Social Investment Scotland has announced grants of up to £1.6 million are available in the form of loans under the second round of its Recovery and Resilience Fund.
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