Britain’s unemployment rate remained stuck at 4.9 per cent in the three months to July, according to the latest figures from the Office for National Statistics (ONS).
While analysts had forecast an uptick to five per cent, the Labour Government is under pressure to tackle the growing number of youth not in employment, education or training (NEETs).
Notably, the number of people claiming jobless benefits climbed by 27,8000 in August, compared with a revised decrease of 11.8,000 in July and the expected 8,300 gain over the period.
As well as this, the ONS confirmed that UK average regular earnings growth also remained at 3.5 per cent over the three-month period.
Unemployment has remained the same, according to the latest ONS figures | GETTY
However, average wage hikes were 0.8 per cent higher after factoring in consumer prices index (CPI) inflation.
Suren Thiru, ICAEW’ s chif economist, warned that the UK labour market continues to be in a “low-hire, low-fire funk” amid the US-Iran war, growing costs on employmers and uncertainty over the next Budget.
He said: “Weak wage growth suggests that elevated employment costs and softer hiring demand are holding back pay rises, intensifying cost of living pressures, particularly as inflation is set to continue edging higher.
“The ongoing drop in vacancies should set alarm bells ringing for the jobs market, as it suggests that demand for workers is wilting under the weight of soaring staffing costs, onerous regulation and increased automation.
John Healey is preparing to unveil next month’s Budget | PA
While the NEETs has fallen from recent highs, numbers remain close to one million | ONS
“The UK labour market could be heading for a rockier autumn, as rising energy bills and pre-Budget tax uncertainty increasingly curb hiring intentions, resulting in moderately higher unemployment and lower pay growth.
“With growth holding up and inflation rising, a cooling jobs market is currently the last line of defence against a rate hike, as these figures offer hope that softer hiring and pay growth can limit the inflationary fallout from US-Iran hostilities.”
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