UK unemployment rises to highest rate in four years

According to new data from the Office for National Statistics, the unemployment rate in the UK reached 4.7%, the highest level in four years. The number of workers decreased by 41,000 in June, surpassing the expected decline of 35,000.

However, as Bloomberg points out, tax increases and the minimum wage hike may have a less severe impact on employment than previously thought. The May payroll decline was revised from 109,000 to 25,000.

Wage growth in the UK, excluding bonuses, fell to 5% in the three months ending in May. Private sector wage growth slowed to 4.9%, marking the first reading below 5% since early 2022. The number of job vacancies fell by 56,000 to 727,000 in the three months ending in June, dropping even further below the pre-pandemic level.

Experts surveyed by Bloomberg have noted a cooling of the country's labor market, which is likely to result in a subsequent interest rate cut by the Bank of England. Currently, another 25-basis-point reduction in borrowing costs by the regulator is expected in August.