UK unemployment rises to 5% as payrolls fall and vacancies drop

What's happened

Official data show the UK jobless rate has increased to 5% in the three months to March, with a 100,000 drop in payrolls in April—the largest monthly fall since May 2020. Vacancies have fallen to 705,000 in the April-quarter, while wage growth remains weak at 3.4%. Retail and hospitality are hardest hit as hiring slows amid economic and geopolitical uncertainty.

What's behind the headline?

Analysis

• The data points to a softening labor market, with unemployment edging up to 5% and payrolls down by 100,000 in April.
• Wage growth remains the weakest since late 2020, edging just ahead of CPI inflation by 0.0%-0.3%, suggesting limited pressure on wages despite price shocks.
• Retail and hospitality firms report hiring pullbacks due to

How we got here

ONS has released figures showing a soft labour market driven by weaker wage growth and a sharp fall in payroll employment, with sectors like retail and hospitality bearing the brunt amid energy-price shocks and geopolitical tensions.

Our analysis

Read the ONS releases and commentary from economists including Thomas Pugh (RSM UK) and ING's James Smith. The Guardian, Reuters, and The Independent provide context on how this affects BoE policy and consumer spending.

Go deeper

• What does this mean for a household income this quarter?
• Will the Bank of England pause rate hikes given the soft wage data?
• Which sectors are most likely to stabilise first?

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