Unemployment in Britain rises to its highest level since 2021 amid a sharp slowdown in the labor market
Britain is witnessing a worrying return to rising unemployment, with the country recording 4.7% in the three months ending May 2025, the highest level since June 2021, according to data from the Office for National Statistics.
Meanwhile, wage growth (excluding bonuses) slowed to just 5%, below expectations (4.9%) and down from 5.2% in April, reflecting a clear slowdown in economic dynamism.
The data also showed a decline in the number of job vacancies to just 727,000 between April and June, the lowest figure in a decade excluding the Covid-19 lockdown.
Surveys indicate that many companies have stopped hiring or aren’t replacing departing employees due to the uncertainty and economic pressure.
These indicators are increasing pressure on the Bank of England to take bolder steps to stimulate the economy, with the Governor hinting that the institution may cut interest rates if labor market indicators continue to weaken.
The current interest rate is 4.25% and is expected to be reviewed again at the bank’s meeting on August 7.
