 "Britain's Prime Mi.nister Keir Starmer Image: AFP")
Britain’s unemployment rate rose to its highest level in nearly three years, official figures showed Tuesday (June 10), as businesses faced mounting pressure from higher taxes and new trade tariffs imposed by the United States.
The Office for National Statistics said the jobless rate increased to 4.6 per cent in the three months to the end of April, up from 4.5 per cent in the first quarter. It marked the highest reading since July 2021.
The rise came as the UK’s Labour government began implementing a business tax increase announced in its first budget last October. At the same time, a 10 per cent baseline tariff imposed on British goods by US President Donald Trump took effect in April, hitting exporters and manufacturers.
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“There continues to be weakening in the labour market, with the number of people on payroll falling notably,” said Liz McKeown, ONS director of economic statistics. “Feedback from our vacancies survey suggests some firms may be holding back from recruiting new workers or replacing people when they move on.”
Wage growth also showed signs of slowing, contributing to expectations that the Bank of England will continue cutting interest rates to support the economy.
The central bank lowered its key interest rate by a quarter percentage point to 4.25% in May. Some analysts now expect further reductions into next year.
“With payrolls falling, the unemployment rate climbing and wage growth easing, today’s labour market release leaves us more confident in our view that the Bank of England will cut interest rates further than investors expect, to 3.50 per cent next year,” said Ruth Gregory, deputy chief UK economist at Capital Economics.
The pound edged lower on the news, while London’s FTSE 100 stock index rose in early trading as markets priced in a more dovish outlook from the central bank.
With inputs from AFP